Posted at 12:39 p.m. PST Thursday, December 16, 1999
Intel plant to bring factory
out of retirement
HILLSBORO, Ore. (AP) -- Intel has announced plans to reopen
its second-oldest Oregon factory to meet swelling demand for
memory chips used in cell phones and other portable electronic
equipment.
The world's largest computer chip maker, based in Santa Clara,
Calif., plans to reopen its suburban Portland plant in Aloha by
February.
The plant, called ''Fab 5,'' will produce flash memory, which can
store information after turning the power off on a cell phone or
other device. Adding the flash memory line will diversify the range
of chips Intel makes in Oregon, where the company is the largest
single industrial employer with 11,000 workers.
However, reopening the 116,000-square-foot plant is unlikely to create many new jobs, said Intel
spokesman Bill MacKenzie.
''It's substantially the addition of equipment and not of people,'' MacKenzie said.
In October 1998, near the end of the longest sales slump in computer chip industry history, Intel
said it planned to mothball Fab 5 by March of this year. It reassigned the 430 workers at the facility
to other plants in suburban Portland.
But as the chip industry showed signs of recovery by last spring, Intel backed off a complete
shutdown.
Industry analysts say that retrofitting an existing plant, rather than building a new plant, shows that
chip-makers are moving as fast as they can to add manufacturing capacity.
''You're seeing behavior that's consistent with a big demand boom,'' said Danny Lam of
Fisher-Holstein Inc. in Arizona.
As of October, sales already had exceeded the Semiconductor Industry Association's forecast for
14.7 percent sales growth this year.
Flash memory is in high demand because the chips are used in a variety of mobile devices such as
cell phones and hand-held organizers. In each of the past three years, the amount of flash memory
sold has doubled, said Dataquest analyst Jim Handy in San Jose, Calif.
Sales are expected to grow from a forecast $3.9 billion this year to $4.9 billion in 2000.
Intel, the largest U.S.-based producer of flash memory, currently manufactures chips in California,
Arizona and New Mexico.
A portion of Intel's retrofit of Fab 5 in Aloha will be part of its 15-year plan to spend about $12.5
billion on equipment and plants in Oregon.
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