Appendix 4

Intel in Sichuan Province, China

Intel recently set up operations in Chengdu, China. The following information about
this project and Intels motivations was compiled from public announcements and
related sources.
In late 2003, the Intel Corporation announced it would invest up to US$375 million
to construct a semiconductor assembly and test plant (ATP) its seventh in
Chengdu, China. A recently announced second plant to handle the most advanced
microprocessors is expected to open in 2007, bringing the total Intel investment in
Sichuan up to US$450 million. The Sichuan-based facility is Intels second ATP in
China; one is already in place in Shanghai on the east coast.
The ATP in Sichuan assembles chipsets using Intels most advanced packaging
technology. The 800,000 square foot Chengdu facility was initially expected to
employ 675, and to create perhaps as many as 3,000 jobs in the region. The site
is 4.5 km from downtown, near the Shuangliu International Airport in Chengdus
High-Tech Industrial Development Zone.
Chengdu has a population of 10.6 million and is the capital of Chinas southwestern Sichuan province. Intel is not the first semiconductor company to invest
in a Sichuan plant. Other companies are being drawn away from Chinas east
coast and Beijing westward to the interior of the country, including Sichuan, taking
advantage of significantly lower wage rates.
The decision to locate another ATP in China was apparently influenced by
increasing demand in Asia and the expected potential of the Chinese market. It
also has been suggested that there is great perceived value in establishing an early,
local presence in a region the Chinese government has targeted for economic
development and increased FDI. Executives at Intel have said that the company
was attracted to Chengdu by its unique strategic position, outstanding educational
system and the availability and proficiency of its workers. In addition, it has been
reported that Chengdu is considered competitively strong on a global basis in the
following areas:
r Number and quality of universities, labs and technical institutes;
r Infrastructure for electronics, including technology parks;
r Cost structure competitive and sustainable;
r Low-cost labor;
r Government policy, including Go West incentives to encourage foreign
investment in the interior of the country such as preferential taxes and infrastructure assistance.

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INVESTING IN DEVELOPMENT INTEL COSTA RICA