Intel plans to shut down older factories

Intel has announced that it is planning to reorganise the production capacity and adjust it to the current market conditions. During last week's presentation of the company's quarterly sales figures, it became known that Intel's profit has decreased with 90% during the last quarter. 

The announced plans affect two production- and testing factories in Penang (Malaysia) and Cavite (Philippines). Both locations will be shut down before the end of 2009. Fab 20, positioned near Hillsboro (Oregon, US) and the D2 factory, near Santa Clara (California, US), will discontinue the production of 200 mm wafers. 

Even though the current credit crunch and disappointing demand has accelerated the plans, Intel has been planning to shut down old factories for a longer time already. The company's strategy is to shrink all chips to the newer 45nm and eventually 32 nm process. Because the chips and processes are shrunk down, more chips can be created from a single wafer. This makes it possible for new factories to produce far more chips at reduced costs, rendering these older factories partially obsolete.. 

The company's reorganisation will cost approximately 5.000 to 6.000 jobs. Intel has already made a statement that it will offer employees a job in one of the other factories. The existing production capacity in those modern factories will be increased, creating new jobs. 

Tags: 32nm

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