DALIAN: Intel Corp has started building a $2.5-billion chip factory in China at the weekend, expanding its foothold in the world's second largest personal computer market.

Called Fab 68, the new factory will start operation in 2010 and become the world's largest computer chipmaker's first 300mm wafer fabrication plant in Asia and eighth globally.

The factory in Dalian, in Northeast China's Liaoning Province, is one of the largest foreign investments in China.