In Brief: Micron opens first chip plant in China

Micron Technology, one of the world's largest memory chip makers, opened its first chip factory in China on Tuesday, the company said in a statement. The Xi'an, China, factory will be used to test and package DRAM (dynamic RAM), NAND flash memory and image sensors.

 By the time the facility reaches its maximum capacity in 2008, Micron's investment in the plant will total $250 million and it will employ around 2,000 workers, the company said. It is only Micron's second such facility in Asia, with the other one located in Singapore. A number of global technology companies have built factories in China in a bid to grab a share of its growing market and to take advantage of low cost labor and numerous incentives offered by the Chinese government.

Chip packaging and testing is the most labor intensive part of the chip production process. Around 20 percent of the cost of such a facility is labor, compared to just 5 percent for facilities that actually make chips. Chip packaging is the final step in the production process, whereby chips are sealed inside protective coatings and readied for placement inside end-products.

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