Intel Speeding up Plant Consolidation in Chengdu
INTC | Quote | Chart | News | PowerRating -- Intel Corporation (Nasdaq: INTC), the world's biggest chipmaker, is looking to speed up its plant integration in Chengdu, Sichuan Province, as part of a planned business optimization in Mainland China.
The company is about to input an additional USD 75 million into its Chengdu branch, said Ge Jun, executive director for Intel China lately, noting that investment in the Intel Chengdu unit is expected to jump to USD 600 million from USD 375 million in 2003.
Intel is scheduled to finish moving the production capacity of its chip packaging and testing plant in Shanghai to the Chengdu plant in a month, completing the integration of the two plants, according to Mr. Ge.
After the consolidation, the Chendgu plant will turn into the biggest Intel chip packaging and testing base in Asia, said Mr. Ge, predicting that the plant in the western Chinese city will outpace all the other Intel China operations in employee number and production capacity. Currently, the Chengdu plant has 2,400 employees, most of whom are sent from the Shanghai plant. The Santa Clara, California-based company worked out a 12-month plant consolidation scheme in an effort to smooth the project, promising to leave salary unchanged for employees willing to move to Chengdu.
"After running for 24 years, Intel has to adjust its strategic deployment in the mainland in face of the lingering financial crisis," said Mr. Ge, "and the focus of the revamp lies in a hike in investment instead of a cut."
Looking ahead, Intel will strive to ramp up the position of China in its business layout in the long term, concentrating on fine-tuning its operating plans and optimizing the existing production capacity in the country, added Mr. Ge.
The company has hammered out a new development strategy for its business in the mainland - set up a triangle operation structure based in Shanghai, Dalian, and Chengdu, disclosed Mr. Ge, describing the plant migration to Chengdu as a crucial step in the strategy.
Information technology firms are expected to see their costs drop to a large extent after setting foot in Chengdu, where the land costs stand 16% lower than in Shanghai and salary payment for IT talents is 50% lower, according to Liu Yong, an official for the Chengdu Municipal Informatization Office.
The company will take Shanghai as its R&D base in the country and build a chip making plant in Dalian, according to Mr. Ge.
(USD 1 = CNY 6.83)
Source: www.hexun.com (November 16, 2009)
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