Intel introduced a $500 million China fund in an effort to increase investments in companies in the world's biggest semiconductor market.

According to a statement released on Tuesday in Beijing, beneficiaries of the Intel Capital's China Fund will include Holdfast Online Technology Co. and Newauto Video Technology Fund.

Intel's strategy of increasing spending in China is to gain a bigger share of the world's fastest-growing major economy.

According to estimates in February, by a research firm IDC, chip sales in China were forecasted to exceed $28 billion in 2011 boosted by the high demand for computing and consumer electronics.

Intel Capital president, Arvindi Sodhani, said the firm aims at increasing innovation and entrepreneurship in China.

Intel is also constructing its first Asia chip factory, worth $2.5 billion, in the Chinese port city of Dalian.

The computer-chip maker had 50 percent, or $5.3 billion of its fourth quarter sales, from the Asia-Pacific region, including China.

Last year, Intel Capital invested about $639 million, and 37 percent of the amount was spent outside the U.S.

Since 1991, Intel Capital has invested more than $7.5 billion in about 1,000 companies across more than 45 countries.

Intel Electronics China