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Intel walks slowly into China |
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Mar 26, 2007 at 12:27 PM |
Bob Johnson, a market analyst at Gartner may not be having the best of Monday's after Intel Corp announced early today that it would indeed be building a 300mm fab in China. Johnson had thrown cold water on the possibility a week ago and I must admit, there was nothing in his reasoning that wasn't logical.
However, my gut feeling that was not influenced by any insider information told me that it was only a matter of time before Intel built a front-end facility in China. Though Ottelini stated the obvious driver in the form of the region being the fastest growing, the key fact is that Intel needs a low-cost base to build chipsets on 300mm wafers.
As mentioned here a couple of weeks ago, when the rumors started circulating I noted that chipsets would be Intel's main reasoning for a fab in China and that has proved true.
But the timing of the fab is a little off! Intel cited 2010 for initial production, while ground breaking is due later this year (though no specific date was given). As most 300mm fabs can be built in less than 12 months now, Fab 68 will not enter production for another year or more!
Intel, it would seem, is being very cautious over its plans in China, perhaps due to the Greenfield site aspect. However, that may not be the whole story.
With Fab 68 only costing $2.5 billion, my guess is that a significant amount of used tools from Intel's other 300mm fabs, such as Fab 11 X and D1D, will wind their way to China and divert attention from the U.S. Government on its advanced technology restrictions to the country.
However, those tools may not be ready to ship in sufficient numbers to start production until 2010 or late 2009!
Intel may also be confident that its cost base on using older and fully depreciated 200mm fabs for chipset production is just fine for the next few years, even though capacity is constrained in some chip areas.
The bottom line is that Intel isn't rushing to China with front-end operations; rather it is taking a slow walk in the sand.
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| Senior Technical Program Manager (Dublin, Ireland, 02/04/2008) | | Senior Embedded Design Support Engineer (Shannon, Co Clare, Ireland, 19/03/2008) | | Embedded Support Engineer (Intel Shannon, Co Clare, Ireland, 19/03/2008) | | Senior Component Design Engineer (Intel Shannon, Co Clare, Ireland, 19/03/2008) | | Customer Engineer (Shanghai , 05/02/2008) |
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