Intel shuts five factories

 

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By Barry Collins

Posted on 22 Jan 2009 at 07:51

Intel is shutting five chip assembly plants as the company braces itself for its first loss in 21 years.

The company will close two facilities in Malaysia, two in the US and one in the Philippines.

Intel claims the closures are merely "streamlining" older capacity and won't affect the production of newer 32nm and 45nm processors.

Nevertheless, the closures will affect up to 6,000 Intel staff, although the company claims that an unspecified number will be offered jobs at new facilities.

The closures come as a leaked memo revealed that the company could make a loss in the first quarter of this year, for the first time since the 1980s.

"We are not going to wake up in six months with everything rosy again," CEO Paul Otellini told employees in an internal memo obtained by the Bloomberg news agency.

After 87 successive profitable quarters, the first quarter is "too close to call," the memo stated.

The warning comes after Intel last week posted a 90% drop in profits compared to the same quarter last year, following slumping demand for new PCs.

It was the first time in 20 years that profits from the Christmas quarter had fallen below those of Q3.