SANTA CLARA, CA - Intel Corp. will invest $2.5 billion to build a new chip fab in China, with construction slated to begin this year. The factory, which will produce computer chipsets, will come online in the first half of 2010, chief executive Paul Otellini said.

The location puts Intel near Dell and Lenovo, two of the world’s five largest makers of PCs. About half of the world’s PC’s are built in China.

The investment raises Intel’s spending in China to a reported $4 billion.

STMicroelectronics, Taiwan Semiconductor Manufacturing Co. and Hynix Semiconductor are among chipmakers building factories in China.

Sales of chips to China will rise to $111 billion in 2011, from $39 billion in 2005, according to IC Insights.