Feb 2 2000
During the company's conference call on January 13,
Intel (Nasdaq: INTC) announced it would spend $5 billion
on capital expenditures for the year 2000. Today, the
company is looking at $1.5 billion spent, $3.5 billion to
go.
Intel announced today it will purchase and refurbish a
fabrication facility from Rockwell International (NYSE:
ROK). Intel expects to spend $1.5 billion for the plant
and the refurbishing costs combined, although the
purchase price was not disclosed.
Intel purchased a total of 944,000 square feet for two
facilities. One, a 268,000 square foot building, will be
used for testing, while the second, at 676,000 square
feet, will be equipped to manufacture flash memory,
logic chips and other communications and networking
equipment, according to Intel.
The additional manufacturing capacity should help
alleviate some of the pressure the company has
received from its customers. Both Gateway (NYSE:
GTW) and Dell (Nasdaq: DELL) will have a disappointing
December quarter due to lack of supply from Intel. While
neither of the new facilities will manufacture
microprocessors, they will address the growing market
for flash memory. Flash memory is used in portable
devices such as cell phones, the demand for which is
strong.
Intel will install its 0.18-micron manufacturing technology
in the fabrication facility. Both new facilities are located
in Colorado Springs, Co., where the company expects to
employ 1000 people.
While the purchase of the facilities is a step in the right
direction, Intel will not see the benefits of the
acquisition until 2001 at the earliest. In the short term,
there will be no affect on meeting demand, but from
2001 the purchase will be part of Intel's natural upgrade
cycle. The move reinforces the belief that the
long-term prospects of the semiconductor industry
are extremely healthy. |
