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Intel Manufacturing Equipment
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... building at the Chandler site, but that came as competitors were canceling or scaling back construction of actual production facilities.
Intel is cutting its workforce by 5 000 employees this year; its stock is off 17 percent, to $ 24.96 a share; and executives worrying about consumer confidence are wary of predicting when the industry might improve. Personal-computer sales remain slow, and Intel continues to face stiff competition from Advanced Micro Devices as its market share declines. Intel also has been bruised by unsuccessful forays into other product lines. Industry analysts note that, on the surface, it might make little sense for Intel to be spending so much when so much of the industry's capacity is idle. But the company has the money to invest, and its aggressive strategy will enable it to make more chips at a lower cost and put the squeeze on competitors, some analysts said. Grant Johnson, knowledge marketplace manager at Converge Inc. in Peabody, Mass., said previous cycles show that those who spend and add capacity in downturns come out ahead.
The risk of such huge projects, analysts say, is that a company will open a new plant in a weak market and have to carry the extra expense. But they add that Intel can afford it, and that a turnaround will come. Fab 22, as the new plant is known, joins its 6-year-old sister, Fab 12, on Intel's 705-acre Ocotillo campus in Chandler. Aside from its lofty price tag, Fab 22 is notable because it will be Intel's third plant to use what is called 0.13 micron processes, and only the second to do so in high volume. The new processes mean that the company can pack more chips on the same piece of silicon, which cuts costs and allows for ever-smaller electronic devices. It is gradually replacing the current industry standard of 0.18 micron processes. The new plant will make Pentium 4 chips for top-of-the-line laptop and desktop computers.
About half the manufacturing equipment has been installed, and when the rest is installed and engineering tests are completed, the managers expect the plant to begin producing chips in the next few weeks.
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