He adds that construction of the new facility is expected to begin in the first quarter of 2001 with production commencing by early 2002. The development is part of IBM's $5 billion investment in the semiconductor chip sector. A key component of its investment program is the previously announced $2.5 billion project in East Fishkill. IBM's Loughran says that the remainder of the semiconductor chip investment program involves "ramping up the chip and packaging technologies" at its other plants around the world. Those facilities are located in: Burlington, VT and Endicott, NY, and abroad in Japan, France, Ireland and Canada.

The Shanghai facility will produce electronic cards and high technology chip carriers incorporating IBM's packaging technologies called surface laminar circuitry and HyperBGA. These technologies are used in wired and wireless networking applications, Web servers and pervasive computing market segments, IBM officials say.

"The establishment of the new packaging facility in Shanghai signifies a new phase in bringing advanced technology to China," says Henry Chow, chairman and CEO of IBM Greater China Group.