New Delhi: Recession is claiming more and more victims. World's largest semiconductor company Intel Corp is now planning to cut up to 6,000 manufacturing jobs as the company struggles with souring personal computer demand.
Slow demand has left Intel's factories operating at less than their full capacity.
Intel said on Wednesday that it plans to close three so-called "assembly test" facilities in Malaysia and the Philippines and will halt production at plants in Hillsboro, Oregon, and Santa Clara, California, where older-style wafers were being produced. Nearly 6,000 jobs will get affected by shutdown of these plants.
The "assembly test" plants are where chip makers send their finished wafers to be sliced into separate chips, put into individual packages, and tested to make sure they work.
Intel however, says that some of the employees will be offered positions elsewhere in the company. Intel wouldn't disclose how much money it expects to save because of the move. The changes are expected to be finished by end of this year.
Capacity is critical in the semiconductor business, because chip makers that don't keep their factories running at full throttle are spending lots of money on facilities that aren't paying for themselves. Underutilised factories are cutting into Intel's margins, and were one reason the Santa Clara, California-based company reported a 90 per cent drop in fourth-quarter profit last week.
Intel emphasized that the cuts wouldn't affect investment in factories specializing in 45-nanometer or 32-nanometer chips. Those measurements refer to the minuscule average size of those chips' parts. Intel's most advanced chips currently being sold use 45-nanometer technology.
Intel shares rose 18 cents to $13.44 in extended trading on Wednesday after the cuts were announced. During the regular trading session, the stock rose 40 cents, or 3.1 per cent, to $13.26.
Intel's smaller rival, Advanced Micro Devices Inc., is set to report its quarterly earnings on Thursday. The company is in the midst of a massive restructuring, having changed CEOs, sold nearly a fifth of the company to an investment arm of the Persian Gulf state of Abu Dhabi, agreed to break off its factories in a moneysaving move, and announcing major job cuts.
AMD plans to cut 1,100 workers in its third big round of layoffs over the last year. AMD had cut 2,200 workers in the previous two rounds of firings.
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