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Intel China fab plan is on track

Posted: 16 Mar 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Intel China fab? 300mm facility? equipment semiconductor?

Intel Corp. is denying rumors within the semiconductor equipment community that it has pushed out plans for a 300mm fab in China, saying it remains on schedule to have the facility in production next year.

The chip giant announced two years ago its intention to invest $2.5 billion to build a 300mm fab in the northern Chinese city of Dalian. The fab, which will be Intel's first in China, was initially slated to use 90nm technology to make chipsets.

Intel spokesman Chuck Mulloy said via email March 12 that there has been no change in plans for Dalian. The company still plans to make chipsets there, starting at 90nm, he said. But he noted that Intel has a license for 65nm and said the company would make a final decision on the technology node later.

The company will begin equipment installation later this year and expects production to begin in 2010, most likely late in the year, Mulloy said.

Sources within the equipment community, who asked not to be identified, told EE Times that the schedule for the fab had been pushed out by at least three to six months. These sources say there has been some question within the equipment community about whether the project will go forward at all.

"Keep in mind that this is our first new fab at a new site in about 20 years," Mulloy said. "We are being very deliberate as we bring it online."

Risto Puhakka, president of semiconductor industry research firm VLSI Research Inc., said he has not heard anything about a delay at Dalian and does not buy speculation that the project could be cancelled.

Others believe there are growing signs of a fab delay. One source said Intel recently cancelled a scheduled planning conference with suppliers about the Dalian fab, blaming supplier travel budget restrictions. Tool move in dates for the fab have been pushed out by about six months, the source said.

Walk a fine line
Speculating, Puhakka said it would not surprise him if there have been adjustments to the schedule, particularly in light of the downturn and lower capacity utilization. Intel may also be finding more used equipment, he said, which would impact suppliers.

One analyst who tracks the market said Intel's proposed fab in China "is delayed to my understanding." The analyst, who asked not to be identified, said Intel must walk a fine line in China and not upset Beijing. Like most chipmakers, Intel has good reason to be politically correct in China: It sees the country as one of its fastest growing markets.

Rumors about a slipping schedule at Dalian come at a time when the success of China's chip industry has been called into question. Once thought to be an inevitable dominant power in the semiconductor industry with its abundance of engineering graduates and comparatively inexpensive labor pool, China's chip building experience has thus far yielded mixed results. The delay or loss of a marquee project by the world's top chipmaker would be seen as a blow to the Chinese government's stated goal of making the country a chip manufacturing power.

Intel "has to say the fab is not delayed to keep the government happy," according to the analyst. Mulloy's statement leaves open the possibility that production won't start until the final day of December, 2010, he noted. "If you will go to get the standard time from groundbreaking to equip to first revenue wafer, you can see that is far from the 'normal' schedule, which is about 12 months."

Intel in January said it would close two fabs and three IC-assembly factories. These actions, at four separate sites, are expected to affect between 5,000-to-6,000 employees worldwide. Intel last month said it would close its IC-packaging plant in Shanghai.

- Dylan McGrath
EE Times

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