Intel is planning to invest $1.6bn to upgrade its Chengdu factory in China, in order to bring its testing technology to the country.
The announcement has come three months after Intel purchased a minority stake in a government-controlled semiconductor company, which is aimed at jointly designing and distributing mobile chips.
Intel is also expected to receive regional and government support the upgraded.
Reuters reported Intel executive vice president William Holt as saying: "Deploying our newest advanced testing technology in China shows our commitment to innovating jointly with China."
"The fully upgraded Chengdu plant will help the Chinese semiconductor industry and boost regional economic growth."
While Intel is planning to expand its business in China, its rival Qualcomm is facing anti-monopoly investigations.
According to reports, the Chinese government is adopting different strategies to benefit its domestic industry and dissolve foreign domination in the field of technology.
Previously, Chinese authorities targeted Microsoft, accusing the software giant of having backdoor in its software.
