Intel to Invest $345 Million at Two U.S. Plants

Company also purchases space in Fort Collins, Colo., to establish design team


Trying to meet demand for its chip sets and other products used in computers, Intel Corp. said Thursday it plans to invest $345 million to beef up the capacity of its manufacturing plants in Colorado and Massachusetts.

The facilities, located in Colorado Springs, Colo., and Hudson, Mass., primarily focus on the chips that serve as the bridge between a personal computer's microprocessor and system memory. The factories also build flash memory found in cellular phones.

Unlike Intel's primary processor plants, the factories etch the chips onto 8-inch, or 200 millimeter, silicon wafers. Pentium 4 and other microprocessors are built on 12-inch, or 300 mm, wafers.

"These investments will increase the capacity of our 200 mm manufacturing network to support our platform initiatives and will give us additional supply flexibility across a range of products," said Bob Baker, general manager of Intel's Technology and Manufacturing Group.

The Santa Clara-based company has reported strong demand in the current quarter, particularly for processors that are used in notebook computers. But earlier this month, it said supplies were tight for chip sets.

The Colorado factory will receive a $190 million investment that will allow the company to complete final work on processors built elsewhere before they are sent out for final testing and packaging. Construction is set to begin immediately, with completion in the second half of 2007.

Intel said the project will create several hundred new jobs over the next three years.

The Massachusetts plant's $155 million will be used to boost capacity by adding new equipment and reconfiguring parts of the factory. It will be used to build chip sets for notebooks, desktops and servers. Intel said it will add more than 300 manufacturing jobs.

Intel also announced it has purchased office property in Fort Collins, Colo., to house a portion of its Itanium design team. That chip, built in conjunction with Hewlett-Packard Co., is used primarily in high-end servers, supercomputers and workstations.

Shares of Intel fell 3 cents to $24.46 in early afternoon trading on the Nasdaq Stock Market.

(c) 2005 San Jose Mercury News