Intel CEO headed to Beijing for major announcement

Otellini's planned visit and the impending announcement come close on the heels of last week's Chinese government announcement that Intel has been given approval to build a US$2.5 billion chip fabrication plant in Dalian, on China's northeastern coast.

"There's going to be a major announcement in Beijing next Monday. That's the key purpose of our CEO being here," said Nancy Zhang, a spokeswoman for Intel in Beijing, discussing reasons for Otellini's visit to China. She declined to comment further on the nature of the planned announcement.

Intel has declined to comment on the chip plant announcement, which came from China's National Development and Reform Commission (NDRC). But that hasn't stopped observers from speculating that Otellini's visit is connected to this announcement.

The Wall Street Journal newspaper on Wednesday said Intel may next week announce a decision on the China chip fabrication plant.

If Intel does announce plans to build a factory capable of making its intricate microprocessors in China, that would be a major coup for the Chinese government and its goal of making China a major base for semiconductor production. China already has several chip makers, including Semiconductor Manufacturing International Corp. (SMIC), but none of those companies compare with Intel, which is the world's largest chip maker and generally leads industry transitions to more advanced production technologies.

The NDRC approval gives Intel the go-ahead to build a factory that produces chips using 300-millimeters wafers and employs a 90-nanometer production process. That technology is several generations behind the most advanced process technology used by Intel to manufacture microprocessors today, but it is still used to churn out memory and chipsets.