CALIFORNIA: Intel Corp said it may invest up to US$5.5 billion in making semiconductors in China, lifting efforts to improve ties with the country as it seeks new revenue streams while demand for its core computer processing chips falters.
The US firm said it would convert a facility in Dalian, its first plant in China, for memory chip production. It didn’t disclose a time period for the investment, but said it will start making advanced memory chips that can store data without using up power, called 3D NAND chips, in the second half of 2016.
The move follows a flurry of deals in the global semiconductor industry, highlighting growing importance of the memory chips used to store data in increasingly popular mobile devices. Researcher TrendForce predicts China will consume US$6.67 billion worth of NAND chips this year, or 29 percent of global NAND industry revenue.
Building its own chip industry has been deemed strategically important by China in its drive to modernize its economy. Intel’s new investment follows a deal last year to buy 20 percent stake of two mobile chipmakers owned by state-backed Tsinghua Holdings Co.
Tsinghua recently unveiled a plan to buy a 15 percent stake in US data storage company Western Digital Corp for US$3.8 billion.
In separate deals, Western Digital said yesterday that it would buy SanDisk Corp for about US$19 billion, giving it better access to flash memory storage chips used in smartphones and mobile devices. Tsinghua is also trying to acquire Micron.
Intel’s latest move raises concerns that new memory supply from the chipmaker could undercut margins for leading industry players.
