US semiconductor giant Intel will set up its second chip assembly and testing plant in the capital of Southwest China's Sichuan Province with an investment of US$375 million, company Chief Executive Officer (CEO) Craig Barrett said yesterday.

Intel signed an agreement with the Chengdu city government yesterday that the first phase of the plant will start in the first half of next year, which involves an investment of US$200 million and is expected to begin operation in 2005.

"We are very excited to bring this technology to Chengdu and this will be a unique opportunity for both Intel and Chengdu," said Barrett.

The first phase project, which will mainly assemble and test Intel's microprocessors, will provide 675 jobs.

The facility will be the second such plant that Intel has in China after setting up a similar one in Shanghai, which also manufactures flash memory used for devices like mobile phones and digital cameras.

Barrett said the second phase of the Chengdu project may involve as much as US$175 million, and employ much more people than those involved in the first phase, but he did not give a timetable for the second phase.

According to Chengdu Vice-Mayor He Shaohua, the Intel venture will create about 3,000 jobs in total for the western Chinese city.

The Intel CEO said the overall need for microprocessors was the primary reason that Intel decided to build another assembly and testing facility in China.

"We are obviously looking to grow our business in the coming years," said Barrett.

Wong Siew Hai, an Intel vice-president and general manager of its worldwide assembly and testing facilities, said that about 90 percent of the production capacity have been put into operation now.

The products made in Chengdu will be both used for China's domestic consumption and exports.

He Shaohua said the largest foreign-invested project in the city will export US$400 million worth of products every year, when the first phase was completed.

Finally, the Intel subsidiary will contribute US$1 billion annually to the total exports of the city when the second phase is concluded.

(China Daily August 28, 2003)