Bloomberg News

Intel Puts New Arizona Processor Plant On Hold Amid PC Slump

January 15, 2014

Intel Corp. (INTC:US), the world’s largest chipmaker, said it will delay opening a new factory in Arizona amid a slump in demand for personal-computer microprocessors, its main source of revenue.

The completed Chandler plant, called Fab 42, hasn’t been filled with chipmaking gear, Chuck Mulloy, a spokesman for Intel, said yesterday in a telephone interview. The Santa Clara, California-based company decided to first upgrade the three other factories on the site because they can use existing equipment, he said.

Intel, which also has chipmaking facilities in Oregon, New Mexico, Ireland and Israel, gets the majority of its sales from computer processors. PC shipments fell 10 percent in 2013, the steepest annual decline on record, according to researcher IDC Corp. The slump is projected to persist, with a 3.8 percent drop in unit sales predicted for this year, IDC said.

Intel shares (INTC:US) rose 4 percent to $26.51 at yesterday’s close in New York. The stock gained 26 percent last year. The company will report fourth-quarter earnings on Jan 16.

The delay in opening Fab 42, which was scheduled to start production at the end of 2013, won’t reduce Intel’s total output, Mulloy said. The decision was reported earlier by the Arizona Republic newspaper.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net


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