Intel Already Has U.S. Gov't Approval On China Fab

Mar 25, 2007 (05:03 AM EDT)

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BEIJING — Intel Corp. has already obtained permission from the US government to build an advanced fab in China, according to a source familiar with the company's plan. The fab is expected to go on line in 2010.

Intel CEO Paul Otellini will be in Beijing on Monday, and is expected to make an announcement regarding the project. So far, the Chinese government has granted approval for a 300-mm wafer plant using 90-nanometer process technology. But there has been no indication that the US government has also agreed until now.

Analysts have already weighed in on the proposal, speculating that Intel would more likely use 65-nm or more advanced technology by the time such a plant could come on line. Some still doubt the project will happen at all.

If Intel confirms the US government has granted permission on Monday, it's more likely that the company has gained a one-off approval from the Commerce Department to transfer its process technology to China, as well as bring in fab equipment from U.S. vendors such as Applied Materials Inc. and Varian Inc.

In general, there is no standardized policy for making decisions about whether to grant export licenses for semiconductor-related sales to China.

Each application is reviewed by an interagency group that includes commerce and defense department officials, and the criteria usually include the reliability of the end user, the stated end use, the level of technology and the export compliance record of the exporter. In all those areas, Intel would score well.