updated 12:30 am EST, Thu January 22, 2009
Intel to close factories
In the latest sign of trouble amongst tech companies, Intel has announced that it will halt production at five of its current facilities. The company will restructure its production and testing operations, with plans to close two assembly test locations in Penang, Malaysia and one in Cavite, Philippines. Production will cease at Fab 20, an older 200 mm wafer fabrication site in Hillsboro, Oregon, along with a wafer production operation at the D2 facility in Santa Clara, California.
The announcement comes less than a week after the company reported a 90 percent drop in profit for the final quarter of 2008. Although the Atom processors brought $300 million in revenue, an increase of 50 percent, the overall demand for semiconductor components has left many facilities operating below full capacity. Intel posted a loss of $1.1 billion just from its equity investments, as the entire industry faces difficult times through the economic downturn.
The Santa Clara-based company isn't the only chip-maker reacting to the current situation. AMD last week announced that it plans to cut 1,100 jobs, approximately nine percent of its workforce, while lowering the pay of existing employees. Even the CEO's salary will be slashed by 20 percent.
Intel's latest transition will affect between 5,000 and 6,000 employees, although many of the workers will be offered positions at the remaining locations. The shift will not affect its operations that handle the newer 45-nanometer and 32-nanometer manufacturing technology. The reorganization is expected to be finished by the end of the year.
"Intel has weathered difficult times in the past, and we know what needs to be done to drive our success moving forward," said Intel's CEO and President, Paul Otellini, in a statement provided with the Q4 financial report.