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. Last Updated: 07/27/2016

Intel Says Russia, China Top Investment Targets

BANGALORE, India -- Intel Corp. plans to ramp up its investments in China and Russia, the world's top maker of computer processor chips said Friday.

"China and Russia are probably the two which will see the greatest percentage growth in our presence over the next several years," CEO Craig Barrett told reporters during a two-day visit to India.

Intel, which aims to invest about $100 million to $200 million in India over the next few years, is keenly looking at neighboring China due to its manufacturing strengths, he said.

China's combination of manufacturing and engineering capabilities and Russia's engineering talent attracted Intel, which had earlier identified Israel, Ireland and India as its investment priorities, he said.

Santa Clara, California-based Intel last May said it was setting up facilities to assemble and test Pentium 4 chips at its Shanghai plant, which tests and assembles chips used in mobile phones and hand-held computers.

Intel has invested about $500 million in China in the last five years, company officials said. The U.S. chip giant plans to employ about 3,000 people in its Shanghai facility by 2004, up from more than 1,200 now.

Intel will focus its investment on research into chip designs and the development of other software, Barrett said.

Barrett said Intel plans to more than triple the number of engineers to 3,000 at its Indian software design center in a few years while continuing to invest in manufacturing facilities in Ireland and Israel.

"That doesn't mean we will abandon our existing sites in countries such as Malaysia, the Philippines or the United States," he said.

"It is really suggesting that we will look for growth, going forward, in places such as India, Russia and China."

India's software industry was worth $7.7 billion in the year ending in March. Two-thirds of its customers are in the United States.

Russia's software outsourcing market had total revenues of some $150 million last year, according to the Market-Visio/EDC research group.

India, meanwhile, is expected to gain $8 billion this year from the sector, up from $6.2 billion in 2001, according to the country's National Association of Software and Service Companies, or Nasscom.

The sector accounts for 16 percent of India's exports. Although almost half the size, China's software development market still pulled in $3.5 billion in 2001.

Offshore software development so far comprises a small percentage of Russia's $3.2 billion information technology sector, which accounted for a tiny 1.16 percent of gross domestic product in 2001, according to UBS Warburg.

(Reuters, MT, AP)