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Intel closing plants, shifting thousands of workers

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Intel closing plants, shifting thousands of workers

Santa Clara (CA) – Intel announced yesterday that they would close some older facilities in Malaysia, the Philippines and the United States. Workers there will either face lay offs or be shifted to other Intel facilities and operations. Intel expects the move will affect as many as 6,000 employees by the end of 2009.

Intel’s brief statement reads in full:

“SANTA CLARA, Calif., Jan. 21, 2009 – Intel Corporation today disclosed plans to restructure some of its manufacturing operations and align its manufacturing capacity to current market conditions. The company will consolidate and streamline some older capacity without impacting the deployment of new, leading-edge 45-nanometer and 32-nanometer manufacturing capacity.

The company plans to close two existing assembly test facilities in Penang, Malaysia and one in Cavite, Philippines, and will halt production at Fab 20, an older 200mm wafer fabrication facility in Hillsboro, Ore. Additionally, wafer production operations will end at the D2 facility in Santa Clara, Calif.

The actions at the four sites, when combined with associated support functions, are expected to affect between 5,000 and 6,000 employees worldwide. However, not all employees will leave Intel; some may be offered positions at other facilities. The actions will take place between now and the end of 2009.”

Just days ago for Q4’2008, Intel reported a 90% decrease in profits to $234 million on $8.2 billion in revenue. Intel’s quarterly profits typically exceed one billion and are often around $2 billion. In Q3’2008, Intel recorded $8.7 billion in revenue with $1.3 billion in net profits. In Q4’2007, Intel recorded $10.7 billion with $2.3 billion in profit.

Intel is reportedly making this move to “align its manufacturing capacity with market conditions,” which are seen declining in nearly every semiconductor sector. The notable exceptions this quarter are IBM and Apple (see Apple analysis also).

See Intel’s press release.