In the US, Santa Clara, California-based Intel said it would spend $190m to expand capacity at its Colorado Springs, Colorado fab and $155m at its Hudson, Massachusetts facility. The pair of 200m silicon wafer fabs produce chipsets, communications and flash memory for diverse Intel platforms.
In China, Intel’s new company, Asia-Pacific R&D Ltd, effectively consolidates Intel’s existing R&D pool of workers in Shanghai and provides a base for the company to expand its research efforts in the country.
China is evolving from a manufacturing-based economy to a broader, diverse economy and includes innovation through world-class education, and R&D efforts, said Boon Lock Yeo, general manager of Intel Asia-Pacific R&D.
Intel plans to employ more than 1,000 workers at its new subsidiary by the end of next year. Located in a new building in Shanghai’s Zizhu Science Park, Asia-Pacific R&D, can house up to 2,000 employees in total.
Currently, Intel has many hundreds R&D workers in the country, said Intel spokesperson Kevin Teixeira.
Engineers at Asia-Pacific R&D would work on product development and platforms tailored for the computing and communication markets in China. The work will be across all Intel’s product and technology groups.
The new R&D facility is part of Intel’s growing emerging markets focus, which chief executive Paul Otellini outlined earlier this year. Intel’s international markets drive more than 75% of its business and emerging countries, such as China, are the company’s fastest-growing markets. Also, by looking outside the US for growth, Intel’s success is not tied to the sluggish US economy.
Researchers at Intel’s new company will further develop new platforms that meet the specific needs of users in China, to capitalize on the country’s growing tech consumption.
For instance, earlier this year, Intel developed a silicon platform for a local PC maker to take advantage of a China-based software program that was loaded on the manufacturer’s machines, Teixeira said. The software enabled the machine to be used as a touch screen for students to practice composition using Chinese characters (a Western keyboard cannot accommodate thousands of different Chinese characters). Intel’s platform, which usually consists of a microprocessor, chipsets and software, was designed to optimize the application, Teixeira said.
Intel would not disclose its investment in Asia-Pacific R&D. China is clearly a target market for the company. Earlier this year, Intel’s investment arm announced a $200m venture capital fund to invest in local companies developing technologies that may fuel demand for its chips. Intel Capital, one of the world’s largest venture capitalists, already has invested in nearly 50 companies in China since 1998.
Intel began to invest in China more than 20 years ago. So far, it has ploughed nearly $1.3bn into the country and employs more than 5,000 workers there. Intel also has a major exploratory research in Beijing, as well as a couple of Flash memory and logic chip test and assembly manufacturing plants in Pudong and Chengdu. Intel does no microprocessor manufacturing in the country.
Shanghai would now have the company’s largest concentration of R&D workers, Teixeira said.
At Intel’s Colorado-based US wafer fab, the new injection of capital from Intel will go to an upgrade of a second clean room that will enable Intel to complete final processing steps for microprocessors (produced on 300mm wafers at other Intel facilities), prior to final testing and packaging.
In Massachusetts, the investment will go to new manufacturing equipment and reconfiguration of parts of the factory. The additional capacity will boost production of various logic products, including chipsets to support Intel’s mobile, desktop and server platforms.
Separately, the company also announced that it had purchased office property in Fort Collins, Colorado to be used as a design center to house a portion of its Itanium processor design team.
