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Intel invests $7bn in 32nm chip plants

Intel is betting on new computer chip technologies to help beat the economic downturn by investing $7bn in advanced chip making plants in the US.

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Intel is betting on new computer chip technologies to help beat the economic downturn by investing $7bn in advanced chip making plants in the US.

Paul Otellini, Intel president and CEO, said the investment over the next two years will fund the deployment of 32-nanometre technology for building faster, smaller, energy efficient chips.

"The capabilities of our 32nm factories are truly extraordinary, and the chips they produce will become the basic building blocks of the digital world, generating economic returns far beyond our industry," said Otellini.

News of Intel's investments at existing manufacturing sites in Oregon, Arizona and New Mexico comes just weeks after Intel announced it is to close two older plants by the end of the year.

Intel said the upgraded plants will be able to support about 7,000 jobs, compared with the loss of up to 6,000 jobs from the planned closure of two plants and two test facilities.

Intel said it was closing the older plant in Hillsboro, Oregon and Santa Clara, California because of falling demand. It said some employees may be offered positions at other Intel facilities.

The closures were announced shortly after Intel posted a $234m profit for the last three months of 2008, representing a 90% drop on the same quarter the year before. For the full year, sales were down 2% and profits fell 24%.

This week Intel has also announced plans to crack the mobile chip market for smartphones as part of its strategy to beat the economic downturn.

Intel is targeting the likes of the Apple iPhone, the BlackBerry and the Nokia smartphone range with chips expected to be launched this year or early 2010.

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