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DALIAN: Intel Corp is expected to conduct a major upgrade of its first China chip manufacturing plant in Dalian by 2010, a senior city official said.

The company will adopt 65-nanometer or 45-nanometer technology at the plant, the official said.

"The plant will definitely adopt more advanced process technology, such as the 65-nanometer or 45-nanometer technology in 2010," said Xia Deren, mayor of Dalian, a seaport city of Northeast China's Liaoning Province.

"The company is also planning to build a world-class research and development facility for chipset technology in the city."

Intel, the world's largest semiconductor maker, said this March it would invest $2.5 billion to build a 12-inch wafer fabrication plant in Dalian. Using the 90-nanometer process technology, the facility is slated to churn out 52,000 pieces of chipsets each month upon its completion in 2010.

Presently, Intel makes most of its advanced microprocessors on 65-nanometer technology and plans to begin the production on next-generation 45-nanometer technology in the second half of this year.

Intel has been trying to cement its lead in China in recent years as the nation is likely to become the world's largest information technology products market by 2010.

The Dalian plant is the company's first wafer fabrication plant in Asia. With a total investment of US$2.5 billion, the facility is one of China's biggest-single foreign-financed projects.

"The plant will give a great boost to the development of Dalian's IT industry, especially the integrated circuit manufacturing sector," Xia said. "We have already seen a number of Intel's vendors considering setting up operations in Dalian."

According to Xia, the chip manufacturing plant will attract more than 100 billion yuan in investment into the seaport city.