Intel shuts plants in the Philippines, Malaysia

Close to 3,000 employees in the two countries will be affected, as chipmaker restructures its manufacturing operations--a move that also impacts two U.S. plants.
Written by Vivian Yeo, Contributor

Intel has announced plans to restructure its manufacturing operations, a move that impacts about 3,000 in Asia, a company spokesperson said Thursday.

Under the restructuring, Intel will close two assembly test facilities in Penang, Malaysia and one in Cavite, Philippines, as well as halt production at Fab 20, an older 200mm wafer fabrication facility in Hillsboro, Ore. and the D2 site in Santa Clara, Calif. The exercise, expected to hit a total 5,000 to 6,000 jobs, will be carried out between now and the end of 2009.

The announcement was made overnight local time via a company statement on Intel's Web site.

According to Intel, the move will align its manufacturing capacity to current market conditions, and involves streamlining older facilities. It noted that the plans will not affect 45-nanometer and 32-nanometer manufacturing capacity.

The news comes a week after Intel reported its fourth-quarter and full-year results. Net income for the final quarter fell 90 percent from the third quarter, while revenue dropped 23 percent quarter-on-quarter to US$8.2 billion, which was according to revised expectations announced earlier this month.

Philippines hard-hit
Nick Jacobs, Intel's Asia-Pacific regional PR group manager, told ZDNet Asia in a phone interview about 1,000 employees in Malaysia, and 1,800 in the Philippines, would be impacted by the move.

"It is our intent to offer positions to impacted employees in other existing factories within Malaysia--Kulim and our newer facility in Penang, known as PG8," he said. Those affected in the Philippines, he added, would be offered severance packages and "a range of transition services", which includes finding alternative employment.

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