Intel has plans to build a major 65nm plant in China. This would be the chip giant's second biggest investment in China.
Intel, which has invested about $1 billion in China to date, already has major test and assembly plants in Shanghai and the interior city of Chengdu.
One source said the investment in the new plant would total a "couple billion" dollars. Both sources declined to give further details of the project, such as the location and timing, though one said the investment could be announced in coming months.
Chip sophistication is measured by how small individual circuits are, with 65-nanometer manufacturing considered one of the most advanced technologies in mass production today.
Intel says China is now an independent sales and marketing region for the company since the beginning of this year.