Intel Shifts China Operations, 2000 Jobs

Intel Corp is consolidating manufacturing and moving 2000 jobs in China as part of its recently announced restructuring.

Specifically, Intel's test and assembly plant near Shanghai and the plant's 2000 workers will be impacted.

"Over the next 15 to 16 months we will wind down operations in Pudong, which is outside of Shanghai, and move that capacity to our facility in Chengdu," Intel Spokesman Chuck Mulloy confirmed with Electronic News.

The 2000 employees impacted by the shift are expected to be offered positions in Chengdu or at Intel's new Dalian site, a 300mm fab under construction now and with initial production slated for 2010. If the employees elect not to take those positions, they will be offered a severance package, Mulloy said.

"It falls within the same total overall workforce reduction of between 5000 and 6000 that we announced a few weeks ago," he said. "It's all part of the overall effort to get our capacity in alignment with current market demand. For example, Chengdu has more headroom for growth when we need it once we get a turnaround."

Intel on January 21 disclosed plans to close or end production at several of its plants, impacting up to 6000 employees, as it aligns its manufacturing capacity to current weak demand and market conditions. Specifically, Intel said it would close two existing assembly test facilities in Penang, Malaysia, and one in Cavite, Philippines, and will halt production at Fab 20, a 200mm wafer fabrication facility in Hillsboro, Ore, USA. The company also noted at the time that some of the impacted employees would be offered other positions within Intel.

The shift in Intel's China operations comes as the company also upped its capital investment in Shanghai by $110 million from the $50 million investment it has there now. Intel has not increased investment in its Dalian facility at this time, Mulloy said.

"We are taking our time with this project [Dalian] because it is our first new fab at a new site in more than 20 years," he said. "We are being very deliberate and there will be a lot of training."

Mulloy said no adverse affects to Intel's research center in Shanghai are expected as part of the actions.

Electronic News, a sister publication of EM Asia