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Intel dismisses Australian fab rumours

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Intel chief executive Craig Barrett has quashed suggestions that the chip giant is planning to set up a new semiconductor fab in Australia.

Rumours of the fab development again resurfaced this month to coincide with the chief executive’s visit, but have been circulating on and off for almost a decade.

“I do not look at Australia as a particularly good place to put a manufacturing plant – you’re too successful to be strong in the manufacturing area,” Barrett said.

“Australia’s opportunities lie more within a value-added engineering perspective.”

Barrett said the company is looking to establish facilities in less-developed countries such as China and India due to lower labour rates and the tax concessions offered by these countries to international companies.

“There is currently an IT skills shortage in many Western countries so it should come as no surprise that we export our manufacturing operations to areas where there is a skills surplus, such as India,” Barrett said.

These issues would also stand in the way of Intel establishing an R&D hub in Australia at some stage in the future, Barrett said.

“The issue with engineering investments is in the ROI and productivity outputs of those facilities,” Barrett continued.

“To achieve the same return on investment in Australia, you need to be able to achieve two to three times the output in order to match the capacity of India.”

While refusing to be drawn into premature hyping of the banias project, Barrett did confirm its delivery date as ‘early next year’.

Built on low-power and high-performance innovations, banias is the first chip to be specifically designed for the mobile computing market.

Currently, PC chips are developed for the desktop space before being modified for use in the mobile market.

Barrett did confirm that wireless capabilities will be embedded onto the chip in the form of a CMOS radio, but did not provide details on how the company plans to overcome difficulties in integrating RF capabilities on the chip design.

“There will be dual band 802.11 wireless radios built into the corner of each banias chip,” Barrett said.

“While it will require two million transistors to perform that function, we estimate the transistor budget we will have in which to do that in the future could span billions of transistors.”

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