US computer chip giant Intel Corporation's first chip plant in Asia began production in northeast China's Liaoning Province Tuesday.

The start of operations was announced at 9:45 am by Kirby Jefferson, general manager of the plant.

"This is the first fab we've built at a brand new site since 1992," said Paul Otellini, Intel's president and chief executive officer, at the commencement ceremony.

The plant has been dubbed "Fab 68," as the numbers six and eight are auspicious in Chinese culture.

"Over time, I believe that Fab 68 will be a prime example of how investment in innovation fuels economic prosperity, and not only in Dalian but in China as a whole," he said.

The US$2.5-billion plant is located in the high-tech Jinzhou New District north of the port city of Dalian. It covers an area of 163,000 square meters, roughly the same area as 23 soccer fields.

With more than 1,700 employees, 88 percent of whom are locals, it will initially produce chipsets for laptop computers, high-performance desktop PCs and powerful servers.

The factory will be Intel's eighth producing 300-millimeter integrated wafers.

It will use 65-nanometer technology, an advanced method of computer chip-making that measures its work in 65 billionths of a meter. The technology is more advanced than the 90-nanometer technology Intel had pledged when it initially announced the project.