As part of the upgrade, Intel said in a
statement on Thursday it would bring its most advanced
chip-testing technology to China. In exchange it will receive
local and regional government support for construction.
"Deploying our newest advanced testing technology in China shows
our commitment to innovating jointly with China," Intel
executive vice president William Holt said in the statement.
"The fully upgraded Chengdu plant will help the Chinese
semiconductor industry and boost regional economic growth."
The announcement comes three months after Intel purchased a
minority stake in a government-controlled semiconductor company
to jointly design and distribute mobile chips, an industry that
China considers to be of strategic importance.
Intel's fortunes in China contrast with the travails of its
rival, Qualcomm Inc, which is expected to announce in the coming
days a potentially record-breaking settlement with Chinese
antitrust regulators.
China's investigation into San Diego-based Qualcomm, as well as
a spate of recent probes against firms including Microsoft Corp,
have prompted an outcry from foreign business lobbies. They say
the Chinese government is increasingly adopting strong-arm
tactics to yield technology-sharing or other arrangements
beneficial to domestic industry.
The government, meanwhile, has defended its regulatory scrutiny
as even-handed. It has pointed to a history of Qualcomm and
Microsoft facing similar antitrust probes in Western countries.
Analysts say there is a broad recognition that foreign companies
must do more to stay in China's good graces.
"Intel's taking the approach that's appreciated by the Chinese
government," Nomura analyst Leping Huang said. "These days if
you want to make money in China, you have to invest in China."
(Reporting by Gerry Shih; Editing by Kenneth Maxwell)
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