September 10, 2007 – Intel says it has started groundbreaking for its proposed “Fab 68” 300mm wafer fab in the coastal Chinese city of Dalian, the chipmaker’s first wafer fab in Asia and first greenfield new fab location in 15 years.

The $2.5 billion fab project, slated to become operational in 2010, will house a “world-class infrastructure” encompassing 163,000 sq. m of factory space with a 15,000 sq. m cleanroom, the company said in a statement. To build up the local talent pool from which to feed its local needs, the chipmaker is donating a 200mm wafer process line to a newly created “Semiconductor Technology Institute” at the Dalian U. of Technology.

The decision to put its first new greenfield fab in more than a decade in China is mainly due to the influence the region has on Intel’s bottom line. Already the company’s second largest market now, China is projected to be the world’s top IT market by 2010, so “we very much felt like it was important to be near our customers,” Kirby Jefferson, GM of the Dalian plant’s general manager, told the Associated Press in an advance interview.

The chipmaker reportedly has received US government approval to transfer 90nm process technologies to the facility, but could decide to eventually transfer 65nm processes once the site is running by 2010 if US regulations allow it, Jefferson added.

The Dalian facility will be Intel’s first new wafer fab in a new location in 15 years, since it laid work in 1992 for Fab 10 in Ireland. Intel says its total investments in China will be close to $4 billion, including assembly/test sites in Shanghai and Chengdu, and R&D centers and labs in Beijing, Shanghai, and elsewhere.

Xia Deren, Mayor of Dalian, said in a statement that the new fab, and cluster of suppliers expected to co-locate there, “will help revitaliz[e] the industries in China’s Northeast region,” dubbed the “Rust Belt.”