The announcement will enhance Intel's interests in China, its second largest market after the United States, the sources said.

The chip giant last year increased its investment in its Shanghai factory to a total of US$500 million.

In a telephone interview with Business Weekly, Barrett said the firm's investments in China were "investments in the future."

He added: "Whether they are marketing, manufacturing, engineering or venture-capital investments, they are all investments in the future and where the markets are going to grow the most rapidly."

As Intel's second largest market, China is growing much more rapidly than any of Intel's other customer countries. Opportunities are huge in China, so Intel's investments in the country are rather big, the chief executive said.

Barrett said he is not worried by the gradual flattening of China's market growth as "what slowed down here is only growth rate but not information technology investment like the United States and Japan experienced."

He said China is building the best communications infrastructure in the world and this will support rapid and stable growth.

Barrett said he will not only make an announcement in Shanghai but will also collect a lot of first-hand information, such as on how many people are using computers and how well the communications infrastructure is.

As telecommunications and computing are converging, Barrett said Intel would like to be a building block in the basic infrastructure.

Since the growth of the telecommunications sector surpassed that of computers, Intel has changed its development strategy in China to provide chips that can provide the functions of both telephones and computers.

"China can be at the forefront with its infrastructure from a competitive standpoint," Barrett said.

Intel recently launched a large-scale technology forum attended by about 1,000 chip experts to pave the way for Barrett's visit.

Intel's major competitor in China is AMD.

Barrett said: "Intel has been competing with AMD for nearly 25 years and, in the last 15 years, AMD has been Intel's major competitor in the microprocessor area. But in the last six to nine months, Intel has been gaining market share over AMD."

Although statistics are not available, Intel's controlling position in China can be observed from the number of its computers in use.

In a suggestion to Chinese chip companies, Barrett said good technology and good products are the key to being successful. "Technology never slows down," he said.

He said the global economic downturn has in fact made it a good time to invest in the next generation of technology to gain a more competitive advantage.

(China Daily May 14, 2002)