The South China Morning Post reported that the US semiconductor firm will invest $300 million into its Chinese arm, Intel Products Chengdu, to fuel the project, according to a WeChat post published by the city’s Reform and Development Commission.
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Intel’s Chengdu plant was first launched in 2003. It packages and tests Intel processors before they are shipped to customers around the globe.
News of the cash injection for its Chinese business comes as Intel is looking to scale back parts of its business to drastically reduce costs.
While the Chengdu plant will receive funding, Intel opted to cut plans to expand factories in Europe, including a $32 billion manufacturer site in Magdeburg, Germany, and a plant near the Polish city of Wrocław.
Another potential victim set for the chopping block is Altera, its programmable logic device manufacturing company, and potentially even Intel’s foundry business, which manufactures chips for third parties, could potentially be spun out or sold.
Rumours have long been swirling of a takeover, however partial, with Qualcomm and Arm Holdings among those reportedly interested.
There’s another facet to Intel’s decision to invest in its Chengdu plant, however, as the Cyber Security Association of China recently recommended that Intel products sold in the country be subject to cybersecurity reviews, claiming it uncovered vulnerabilities in several of its processors.
As part of Intel’s Chinese expansion, the company will also construct a new customer solutions centre to “improve the efficiency of the local supply chain [and] increase support for Chinese customers.”
Intel is likely keen to keep a key market on side, considering China represents one of Intel’s largest markets, responsible for 27% of its total revenue in 2023.
SCMP said that Intel China expressed commitment to ensuring product safety and quality in the wake of the Cyber Security Association’s claim.
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