The Chengdu plant, which is expected at first to employ 675 people, is expected to begin construction in the first half of 2004 and become operational in 2005. Intel said it expects to invest up to another US$175 million and add additional employees in the future.

Intel, the world's largest computer chip company, already has a presence in China, including another test-and-assembly facility in eastern China. It also has research and development laboratories in Beijing, Shanghai and Shenzhen.

The company selected Chengdu because of its strategic location and availability of a well-trained work force. Intel said in a statement that it decided to build in response to growing demand for its chips in Asia and elsewhere around the world.

Intel has similar assembly and testing sites in Penang and Kulim, Malaysia; Cavite, Philippines; and San Jose, Costa Rica