SAN FRANCISCO Jan 14 Intel Corp, hit
by slumping personal computer sales, has put off opening a major
chip factory that President Barack Obama once held up as an
example of U.S. manufacturing potential.
The "Fab 42" facility built in Chandler, Arizona, originally
slated as a $5 billion project that in late 2013 would start
producing Intel's most advanced chips, will remain closed for
the foreseeable future while other factories at the same site
are upgraded, said Intel spokesman Chuck Mulloy.
Intel's decision not open the chip plant was first reported
by the Arizona Republic on Tuesday.
"The new construction is going to be left vacant for now and
it will be targeted at future technologies," Mulloy told
Despite not opening the new factory, or fab, Intel has
exceeded a target to hire over 1,000 employees since
construction started in 2011, Mulloy said. Intel received state
tax benefits for hiring those people.
Campaigning for re-election in 2012, Obama made a stop at
the factory's construction site, where he called for government
incentives to attract manufacturing lost to Asia in recent years
back to the United States.
Intel is the world's top chipmaker but it was caught
offguard by smartphones and tablets, a computing revolution that
has cut into demand for PCs, the company's core business.
Global PC shipments fell 10 percent in 2013, the worst year
since market research firm Gartner began tracking those
"The newer fab has not been equipped with the capital
equipment. It has heating and air conditioning but the actual
tools, the expensive stuff, are not in there," Mulloy said.
Intel originally meant to install its most advanced
manufacturing technology at the plant and make 14 nanometer
microchips with transistors so tiny that over 100 million of
them could fit on the head of a pin.
Existing factories at the Chandler site using Intel's
previous generation of manufacturing, 22 nm, are being converted
to also make chips at 14 nm and many of Intel's new employees
are working there, Mulloy said.
"It boils down to better capital utilization," Mulloy said.