Dalian has Intel Inside. 2.5 Billion Worth!

Monday, March 26, 2007 7:43

With their latest announcement, Intel has bet the proverbial farm on Dalian, the beacon of light for China’s Northeastern rustbelt provinces of Jilin, Liaoning, and Heilongjiang.

At 2.5 billion USD, this deal was announced at the Great Hall of the People, and will reportedly employ 1500 people on its 1.7 million square feet.

Intel President and CEO Paul Otellini said:

“Fab 68 will be our first new wafer fab at a new site in 15 years. Intel has been involved in China for more than 22 years and over that time we’ve invested in excess of $1.3 billion in assembly test facilities and research and development. This new investment will bring our total to just under $4 billion, making Intel one of the largest foreign investors in China.”

As we highlighted in our Dalian profile a couple months ago, Dalian has been very successful at transforming from a city with a port to a city were high value technology manufacturing and R&D have found a home.

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7 Responses to “Dalian has Intel Inside. 2.5 Billion Worth!”

  1. The Hao Hao Report says:

    March 26th, 2007 at 9:44 am

    Dalian Has Intel Inside…

    Dalian continues to attract high tech industries with a new announcement that Intel will be further investing 2.5 billion USD into facilities in the Liaoning port city….

  2. Absurdfool says:

    March 26th, 2007 at 9:52 pm

    Intel’s Dalian deal owes all to Mr Bo, Minister of Commerce, who being the one whom made Dalian’s inustrial transformation and a matchmaker of the marriage.

  3. Chris (Eyes East) says:

    March 28th, 2007 at 7:01 am

    This has been the big discussion topic in Dalian all week. It’ll be interesting to see what happens next. There’s been some question of whether the area has enough water to manufacture chips. What do you make of the speculation–mentioned in the LA TImes and other places–that Dalian wasn’t Intel’s first choice?

  4. rbrubaker says:

    March 28th, 2007 at 7:17 am

    Hi Chris,

    You raise an interesting question, and one that has not been asked yet in Shanghai… at least not in my circles.

    given Intel is already in Chengdu, one has to wonder why they would choose one of the most expensive of the 2nd tier cities to invest in. After all, if these chips are for domestic consumption, there are other cities further south and west.

    Add to that the fact that their 2nd commitment to Chengdu has gone unfulfilled due to the overall Intel performance, and you have a bit of a mystery.

  5. Chris (Eyes East) says:

    March 28th, 2007 at 6:46 pm

    Dalian seems to make sense because of the already strong IT industry here. Then again, IBM is starting to move people from the Dalian branch to Chengdu, in part because this city is getting more expensive. One possible explanation is that Dalian is shifting away from a Japan- and Korea-focused BPO market and trying to be a bridge between North America/Europe and the Chinese market. I don’t know enough about Chengdu to say what’s happening there. Could be the same story.

    Also, a friend told me yesterday that this is already (slightly) old technology, but I’m not tech savvy enough to add to that. If so, that would seem to alleviate the national security concerns a bit, I think.

  6. rbrubaker says:

    March 28th, 2007 at 11:21 pm

    I have been out to Chengdu several times in the last year, and the IT industry (particularly in software, aerospace, and R&D) have been picking up. There is not a lot of hardware manufacturing there (yet) due to the logistics issues of moving it to the coast and the lack of regional market.

    With that being said, Chengdu is much cheaper than Dalian in terms of land & labor, and the government (central, provincial, and local) entities are willing to offer more incentives for the market.

    Dalian did a great job of attracting investment through language skills and quality education. Chengdu will have to leverage their costs and access to SW market.

    RE level of technology – I have read that in the papers/ blogs, but I know little about the processes or products involved here. I know that there are different sized wafer plants, and that the larger the wafer the more technology involved. So, to hear that they are not spending as much on this plant as they are moving in equipment from other plants leads me to believe this plant will not be using the latest and greatest technologies.

  7. rbrubaker says:

    April 4th, 2007 at 7:47 pm

    For those athat are interested, Intel has put up their pitch for the project and Dailian (I am sure the government of Dalian will approve of the sell).