Intel is to build a $2.5bn (£1.3bn) computer chip plant in China, boosting the country's high-tech industry.
Intel says China is its fastest-growing major market
It will be Intel's first integrated wafer plant in Asia, serving the US firm's "fastest-growing" market.
"This project confirms... the strategic importance of China in our global strategy and the IT industry around the world," said Intel boss Paul Otellini.
However, the technology used in the plant is at least a generation behind Intel's most advanced computer chips.
Intel already employs more than 6,000 people in China, making memory chips at factories in Shanghai and Chengdu.
The new factory, where production is scheduled to begin in 2010, will use 90-nanometre technology.
It will be based in the port city of Dalian, in the north-east of China.
"China is our fastest growing major market, and we believe it is critical that we invest in markets that will provide for future growth to better serve our customers," said Mr Otellini.
Intel wanted to "support a transition from 'manufactured in China to 'innovated in China'," he said.
Zhan Xiaoqiang, vice chairman of China's National Development and Reform Commission, said he hoped the new factory would "bring more value-added research projects" to the region.
The new factory will take Intel's total investment in China to $4bn.