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To: Paul Engel who wrote (114759)	10/23/2000 8:10:15 AM
From: Road Walker	Read Replies (1) \| Respond to of 186894

Monday October 23, 5:39 am Eastern Time Intel to double China plant investment-executive By Edwin Chan SHANGHAI, Oct 23 (Reuters) - Giant Intel Corp (NasdaqNM:INTC - news) said on Monday it will invest some $200 million to expand capacity at its sole chip assembly and testing facility in Shanghai and fund a shift to computer chipset assembly over the next two years. ``We've got a $198 million investment here ... and we'll at least be doubling that,'' James Jarrett, vice president of Intel's worldwide government affairs, told reporters on the sidelines of an Internet conference in Shanghai. Intel has started expanding its present plant in Shanghai's free-trade zone in the financial district of Pudong. It is moving beyond assembly of FLASH memory chips used in handsets and hand-held computers and toward the assembly of the chipsets found in computers and servers, Jarrett said. Intel President and Chief Executive Officer Craig Barrett told a news conference earlier that the world's number one chipmaker would also be on the lookout for opportunities in wafer fabrication in China. ``We will continue to keep our eyes open and look for options with regard to wafer fabrication type of manufacturing -- silicon manufacturing,'' Barrett said. But one big challenge was that the state-of-the-art 12 inch, 0.13 micron or less wafer fabrication plants that the company is targeting may face U.S.-imposed technology export constraints. Barrett said China's integrated circuit manufacturing sector lagged the United States and Japan because it lacked efficient distribution channels. ``It is not enough just to have an integrated circuit industry, but you really need to have a high-level industry which can help you distribute that product into the marketplace,'' Barrett said. CHINA FORECASTS CONSERVATIVE Barrett had a bullish outlook for China, saying almost every forecast of the country's Internet and e-commerce potential was too conservative. ``You are just on the tip of the iceberg ... I think the opportunities are huge,'' Barrett told some 1,000 Chinese and foreign executives. China is expected to become the third largest online market in the Asia-Pacific region by 2003, according to research group International Data Corporation. Barrett said China would account for one-third of all Asian Internet users in a few years as the number of web enthusiasts jumped to 50 million from the present 10 to 15 million. Asia and Latin America would account for about $1 trillion of a projected $7 trillion in global B2B e-commerce by 2004, although China's contribution would be small, Barrett said. ``Asia and Latin America are lagging behind by one or two years, but I think the forecast is conservative,'' he said. China's Internet industry would undergo explosive growth as it upgraded the telecommunications infrastructure, lowered access costs and educated relatively unsophisticated Chinese users, he said. Growth would also come from businesses turning to e-commerce procurement and sales to manage their supply chain and improve efficiency. ``The challenge is really for big business to lead the way,'' Barrett said. Email this story - View most popular stories emailed