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With Eyes on China, Intel Invests Billions In Mobile Ambitions

Posted by timothy on from the in-china-intel-gets-you dept.

itwbennett writes The allure of mobile devices has led Intel to take some uncharacteristic moves, partnering with Chinese companies to build some smartphone and tablet chips, and relying on third parties to manufacture those chips. Intel is betting the partnerships will accelerate its business in China, where smartphone shipments are booming. But the company wants to regain complete control over manufacturing, and on Thursday said it was investing $1.6 billion over 15 years in a China plant for mobile chip development and manufacturing.

33 comments

  1. Big Mistake by TheEyes · · Score: 3, Insightful

    And thus does Intel make the same mistake that hundreds of companies around the world have made before it: putting intellectual property in physical reach of the Chinese government. Fast forward five years and I'm almost certain we'll see Foxconn or some other Chinese company with ties to the Chinese government have a series of "research breakthroughs" that mysteriously parallel the exact technologies that Intel brought to its own plant, which is once again down for "inspection".

    It's not like this sort of thing hasn't happened already.

    1. Re:Big Mistake by Mostly+a+lurker · · Score: 4, Insightful

      Perhaps. That is certainly a valid concern. However, the state of the art in this area is continually advancing very quickly. Just having an advanced fab in China does not mean that Chinese engineers are able to create the next generation chips and fabs. I think Intel's move is quite logical, and the danger of intellectual property theft not too serious in their case.

    2. Re:Big Mistake by Trepidity · · Score: 4, Informative

      It's definitely a risk, but I would be surprised if they're going to be using their latest-gen technologies there, partly for that reason. So Foxconn will be able to pilfer some older tech which is by that point less secret to begin with.

      Intel already has one fab in China, in Dalian, but it's on a 65nm process, several generations behind the 14, 22, 32, and 45nm processes that they use in their American fabs.

      --
      10 PRINT CHR$(205.5+RND(1)); : GOTO 10
    3. Re:Big Mistake by drolli · · Score: 1

      I dont think that they will set up the EUV Production lines there.

    4. Re:Big Mistake by Kjella · · Score: 4, Informative

      It's definitely a risk, but I would be surprised if they're going to be using their latest-gen technologies there, partly for that reason.

      You know, you could RTFA:

      The chips made in the Chengdu factories won't be based on the latest process manufacturing technology, McGregor said, adding that Intel wants to protect its intellectual property and won't transfer its latest manufacturing process to China.

      --
      Live today, because you never know what tomorrow brings
    5. Re:Big Mistake by cheesybagel · · Score: 1

      You would be wrong. Lithography has not been advancing as fast as it used to be. For example the light sources have not improved at all for like a decade. Today the advances are made by fiddling with more complex masks and immersion fluids and crap like that.

      China has already been trying to crack into this market with SMIC and the like. This is like adding fuel to the fire.

    6. Re:Big Mistake by cheesybagel · · Score: 0

      There are trade sanctions against selling latest generation chip manufacturing tools to certain states including China. I do not think even Intel would try to challenge that.

    7. Re:Big Mistake by cheesybagel · · Score: 2

      At this rate there will be EUV production lines nowhere.

    8. Re:Big Mistake by drolli · · Score: 1

      i think there will be. Too big to fail....

    9. Re:Big Mistake by Anonymous Coward · · Score: 0

      Foxconn isn't even Chinese idiot...

    10. Re:Big Mistake by cheesybagel · · Score: 1

      I have been hearing that for over a decade now. Plus they used to call this soft x-rays in the 1960s and it went nowhere back then as well.

    11. Re:Big Mistake by Mostly+a+lurker · · Score: 1

      If you believe advances in lithography are no longer occurring, you are clearly unfamiliar with the huge investments attempting to bring EUVL (extreme ultra violet lithography) to production fabs. However, in another sense, you are correct that other technologies (such as plasmonics) are going to be more important in developing the future 3D chips. You have not convinced me that Intel's move is going to make it much easier for China to become leaders in these areas than Micron's R&D centers in Shanghai and Xiamen and its fab in Xian.

    12. Re:Big Mistake by Anonymous Coward · · Score: 0

      The bigger mistake is to assume that Intel is not fully cooperating and providing all the 'access' the government needs to ensure all users are 'complying with the law'. Your 'encryption' will become even more worthless than it is now. And that goddamn Adobe Premiere still won't render video any faster than it did 10 years ago.

    13. Re:Big Mistake by PaddyM · · Score: 2

      RTFA? Our ewe knew hear?

    14. Re:Big Mistake by citizenr · · Score: 1

      It was either that, or getting thrown out of China like Qualcomm. Intel was screwed no matter what, this way at least they get to slap a lot of intel inside stickers on cheap phones and getting piece of the market.

      --
      Who logs in to gdm? Not I, said the duck.
    15. Re:Big Mistake by Dorianny · · Score: 1

      The US intelligence community has long warned that China's government has been waging a campaign of industrial and military espionage through hacking and even the White House asked them to "Stop hacking, pretty please". It really doesn't matter whether you have those secrets in China or somewhere else, the Chinese will get to them. I for one say hallelujah. For us the consumers, more competition is a good thing.

    16. Re:Big Mistake by Anonymous Coward · · Score: 0

      Except Foxconn specifically is a Taiwanese company... China tolerates them begrudgungly

    17. Re:Big Mistake by tlhIngan · · Score: 1

      The thing is, Intel pretty much buys the same equipment that everyone else has access to for fab technology.

      The problem is the fab equipment is REALLY expensive and sourced from Japan, and it has to be that way in order to produce usable chips. With each wafer costing $1-3K each, sub-standard equipment brings the cost up VERY quickly.

      In fact, this technology is pretty much open - even Intel has opened FinFETs to everyone, not because they're not cutting edge, but because if you can do it, you're already quite advanced (hint: it's not easy).

      No, the biggest IP violations is not the fabs, it's the stuff the fabs make - the chips themselves. Because the next-gem chips are made there 6-12 months before they show up in products, if you can get at those, there's a very big advantage.

      Fabs are expensive and require a ton of money. Intel has that. If China wanted, they could open their own fab, but they haven't. But it's not the fab that's important, it's the stuff the fab makes as they're often the latest and greater technology.

    18. Re:Big Mistake by lsatenstein · · Score: 1

      Perhaps. That is certainly a valid concern. However, the state of the art in this area is continually advancing very quickly. Just having an advanced fab in China does not mean that Chinese engineers are able to create the next generation chips and fabs. I think Intel's move is quite logical, and the danger of intellectual property theft not too serious in their case.

      Intel, like GM will gradually leave the USA for permenancy in China. Population 1.2 billion vs 350 million, Single party government vs democracy, better labour cost controls, lower overheads and government (universal) medicare.

      --
      Leslie Satenstein Montreal Quebec Canada
  2. Regain control by moving manufacturing to China by Anonymous Coward · · Score: 0

    That'll work.

  3. Only $1.6B? by Anonymous Coward · · Score: 0, Interesting

    Well that may get you a plant that can turn out 28nm chips but will those cut it these days? I hardly think so.
    This appears (IMHO) to little more than a sap to the Chinese Gov.
    They my well import the chips into the plant and package them there. That may be enough to put a 'made in the PRC' label on them depending how well greased the palms of the right people in the PRC Gov are.

  4. What now? by Opportunist · · Score: 1

    Regain control of your IP and manufacturing OR invest in a Chinese manufacturing plant. Pick one!

    --
    We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    1. Re:What now? by timeOday · · Score: 1
      Guess it depends which you think is the bigger threat to Intel - technological inferiority to a peer competitor (first priority: protect IP), or technically inferior but "good enough" low-cost competition (first priority: ramp up low-cost production).

      Both seem like serious threats. If you lose on volume long enough, you then also lose your technical edge. Just like Intel did to DEC, Sun, etc.

  5. It's good business by Anonymous Coward · · Score: 0

    China, the largest economy in the world, is still a "developing" nation and so there is huge potential for growth and profit. It just makes good business sense to go after those markets. Don't get me wrong, the US is still a large market, but it is a mature market with little room for explosive growth. Also, the engineering and manufacturing talent in China is far superior to that in the US, so Intel will benefit from shifting focus there.

  6. Hard times for a former monopolist by JoeyRox · · Score: 2

    Intel is learning that success doesn't come as easy in business segments where your tried-and-true monopolist practices don't apply.

    1. Re:Hard times for a former monopolist by Kjella · · Score: 1

      Meh, Intel wanted to buy enough market share that developers will make x86 Android builds and I think they succeeded. ASUS MeMO Pad, Acer Iconia, Dell Venue, Nokia N1 and a bunch of lesser brands now make x86 tablets which means you probably want to compile any native code for x86 not just ARM. That's their foot in the door, now that the contra revenue ends we'll see what they do with it.

      --
      Live today, because you never know what tomorrow brings
  7. Avoiding the ire of chinese government by edxwelch · · Score: 1

    Investing in Chinese companies is probably a tactic to get on the good side of the Chinese government.
    Consider what Intel is doing in China: giving away subsidised SoC's that compete directly with local Chinese companies. That sort of anti-competive behavour normally attacts tariffs (a similiar sort of thing has happen before US Department of Commerce Ignores WTO, Imposes Preliminary Anti-Dumping Tariffs of 26-165%

  8. Good Luck by sdguero · · Score: 2

    The high rate of employee turnover, politics, and finger pointing that goes on in the China office I work with (aprox 300 engineers in Beijing) is shocking. I don't know how a company can expect to be sucessful at doing real engineering and development work over there.

    1. Re:Good Luck by Anonymous Coward · · Score: 0

      Politics and finger pointing are the basis of office work everywhere.

  9. meaningless tripe by Anonymous Coward · · Score: 1

    Intel spends upwards of $7 billion to make a fab. What they are doing is not a fab.
    Intel already has big assembly test manufacturing sites in China and has had it since last century. CD1 and CD6 are huge.
    http://download.intel.com/newsroom/kits/22nm/pdfs/Global-Intel-Manufacturing_FactSheet.pdf

    $2 billion in 15 years is $130 M/yr. The CEO, Krzanich, makes $9M/ year. This is only about 15x his salary. The Intel board take-home pay is larger than this "investment".

  10. one thing i noticed by Anonymous Coward · · Score: 0

    Leadership of corps that try to "shift operations to china" are not operating in good faith.....what they are really doing is "busting out" the corporation. The Chinese will kick back a percentage of the ill gotten gains the executives helped them loot, in the form of cash.

  11. slashdot hype by swell · · Score: 1

    TFA article headline:
    "Intel plunks down billions to expand in mobile market"
    Slashdot article headline:
    "With Eyes on China, Intel Invests Billions In Mobile Ambitions"

    What's the difference? Every word in /. is in Caps!

    What's the point of this? Is it a deliberate attempt to confuse and corrupt? Look at headlines in any respectable publication and you will find sensible, understandable headlines. Major words in caps, Trademarked words in caps ... Slashdot's insistence on every word starting in a capital letter is juvenile and misleading and not conforming to any journalistic standard.

    Just stop it or you'll hear from me again on this.

    --
    ...omphaloskepsis often...