SHANGHAI: Intel Corp. will close a factory in Shanghai in a reorganization of its China operations this year that will shift work to plants in other cities, the company said Thursday.

About 2,000 workers will be affected by the decision to move Intel's chip assembly and testing operations to Chengdu, in central China, from eastern Shanghai's Pudong district, the company said in a statement on its Chinese-language Web site.

The plan is meant to optimize the company's manufacturing resources in China, it said.

Intel, the world's largest semiconductor company, said it would keep its mainland China headquarters and a research and development facility in Shanghai.

Shanghai employees affected by the move will be offered the chance to relocate to Chengdu or to a factory now under construction in the northeastern port city of Dalian, Intel said.

Today in Business with Reuters
Japan's big-works stimulus is lesson for U.S.British bank adapts to life on a leashU.S. senators draft list of cuts in stimulus planSanta Clara, California-based Intel underscored its commitment to China by raising its investment in Intel China Ltd., its Shanghai-based investment holding company, by $110 million this year.

Intel's research center in Beijing and its Intel Capital China Fund II will not be affected by the reorganization, the company said.

Last month, Intel said it planned to cut up to 6,000 manufacturing jobs as the company struggles with souring personal computer demand that has left its factories operating at less than full capacity. The company recently reported a 90 percent drop in fourth-quarter profit.

The earlier job cuts included closing three "assembly test" facilities in Malaysia and the Philippines. Such plants are where chip makers send finished wafers to be sliced into separate chips, put into individual packages, and tested to make sure they work.

Intel to close China plant by year-end
By Marina EmmanuelPublished: 2009/02/06 

TWO weeks after announcing plans to shut its factories in Malaysia, the Philippines and the US, the world's biggest chipmaker, Intel Corp, yesterday said it is closing a plant in China.

Business Times has learnt that the company's assembly, test and manufacturing plant in Shanghai - where over 2,000 people are employed - will cease operations by the end of this year.

Sources said unlike in Malaysia where Intel has made no moves to offer a voluntary separation package to affected employees, Intel China staff who are affected by the Shanghai facility closure are being offered separation benefits.

Last week, it was reported that Intel's move to restructure and align its manufacturing capabilities globally will see the closure of the company's PG6 and PG7 facilities in Penang.

Intel Malaysia had said that around 1,000 staff would be affected and the company plans to offer comparable jobs to affected employees within its existing facilities in Penang and Kulim, Kedah.

Although the two facilities are currently operating below capacity and it looks unlikely that all affected staff can be redeployed, the company has made no promises so far on any retrenchment benefits.

It is learnt that the Kulim facility is likely to accommodate around 300 engineers who are likely to be affected by the Penang factory closure, while production operators who are affected are going to be left with the shorter end of the stick with no alternative work or compensation.

Asked if Intel will reconsider its stand and offer affected Malaysian staff benefits like those in Shanghai, Intel Malaysia corporate affairs manager Loo Cheng Cheng said: "We are currently working on the next level details and will do so for the next few weeks."

They should have use that US7B to at least sustain operation in PG7 and PG6 during this tough time...Not sure whats their plan...slash here and upgrade there.

Look from it from the Return of Invesment point of view, propping up PG6 and PG7 isn't going to solve anything in the long term, those two facilities will have to shut down one day due to cost issues. However, if you spend the money upgrading fabs and move to new technology, you remain the market leader and sell more, earn more, i.e. the company survives.

The latest rumor i have is that they are going to close down Penang site except for R&D.

The latest rumor i have is that they are going to close down Penang site except for R&D.

ini abit over liao leh ... where u heard 1 ?

The latest rumor i have is that they are going to close down Penang site except for R&D.

heh... hasn't it been known that they have been booting non R&D departments off to kulim for a long time already ? Its known among penangites or at least the FIZ'ers that intel aims to convert Intel PG into R&D years ago .. just that some of the non R&D ppl were resisting..

This economic recession has told us to think twice before working for a MNC again.

this makes a lot of sense to me
better than some "rumors"

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Added on February 13, 2009, 12:57 pm

no one is exempted from global recession ler... gotta think twice before joining any company.