Intel puts on hold Fab 42 in Arizona, will use for 'future technology'

The chipmaker announced in 2011 plans to spend $5 billion on Fab 42

Intel has put on hold a new chip manufacturing facility at its site in Chandler, Arizona, leaving the new space available for unspecified future technology.

The company said in February 2011 it was investing over US$5 billion in the new Fab 42, which was expected to be completed last year. The fab was to begin operations on a process that would allow the chipmaker to create transistors with a minimum feature size of 14 nanometers.

It was announced by former Intel President and CEO Paul Otellini during a visit by U.S. President Barack Obama to an Intel facility in Hillsboro, Oregon, and was highlighted by Obama as an example of U.S. manufacturing potential.

"First just so its clear we've been headed down this path for some time," Intel spokesman Chuck Mulloy said via email on Tuesday. He said the building for the new facility was completed on schedule.

The company will still be deploying 14-nanometer technology in Arizona, but will do it in existing fab space at the site rather than at the new facility to improve capital equipment efficiency and to leave the new space available for future technology, Mulloy said.

"By running both 14 and 22 nm processes at the same time we get better utilization of our equipment," he added. Mulloy did not specify what the new technologies were.

Intel's move comes amid a slump in the PC market. In 2013, unit PC shipments worldwide declined by 10 percent from 2012, with shipments declining for seven consecutive quarters, research firm IDC reported last week.

Computer chips remain the mainstay of Intel's business as the company tries to increase share in new markets like mobile computing and wearables. At the International CES trade show earlier this month, Intel announced its tiny Edison computer for wearable devices.

Intel has microprocessor facilities in Oregon, New Mexico, Ireland and Israel, besides the ones in Arizona.

The company was to employ over 1,000 staff at the facility which Mulloy told the Arizona Republic newspaper had already been added. The newspaper reported that there are about 11,900 full-time employees at Intel's two Chandler campuses, up from 9,700 full-time employees when plans for the facility were announced, the newspaper said.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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