Intel to Manufacture Mainboards in Russia?

by Anton Shilov
01/26/2004 | 09:34 AM

Intel reiterated its commitment in expansion of its manufacturing facilities and setting up new fabs globally late last week. Apparently, the world’s largest chipmaker is considering the Russian Federation as a possible location for building up certain new manufacturing facilities.

At talks late last week, Russian acting minister for industry, science and technologies Andrei Fursenko and president of Intel’s Russian division Steve Chase pondered the possibility of housing production of Intel electronic components in Russia, according to a report from RIAN.ru.

“The talk is about printed circuit boards and products on their base – telecommunications and network products, expansion cards, PCs and laptops, servers,” spokesperson for the Industrial Ministry’s said Monday.

According to Mr. Chase, Intel Corporation commands 85% of Russia’s CPU market. Therefore, it would be quite logical to manufacture certain PCB-based equipment in the country, as it would help to avoid certain taxes.

Steve Chase said 90% of PCB-based components production is now concentrated in Southeast Asia and the total cost of work is exceeding one billion dollars. Locating production in Russia, Intel will redistribute the ratio in favor of the Russian economy, Chase explained.

In the course of negotiations there were discussions in regards customs duties for components’ import into Russia and actual product’s export from Russia. Fursenko emphasized that it is necessary to examine the possibility of reduction duties not only on complete PCB-based components, but also on tools and equipment for building such components, e.g., SMT assembly systems.

Russian acting minister for industry, science and technologies said that certain preferences should be given to high-tech companies, which is in-line with the general trend for the country’s economy. He assured partners of readiness to continue negotiations after getting specific proposals.

Currently Intel has certain R&D and marketing divisions located in Russia. The company investigates on possibility of establishing additional facilities in countries like China and India. The firm manufacturers the vast majority of its mainboards and other PCB components on facilities of contract makers.