Intel Soars on Announcement of $2 Billion Plant Expansion
By Carolyn Koo
TheStreet.com/NYTimes.com Staff Reporter
5/24/00 5:25 PM ET
Intel (INTC:Nasdaq - news - boards), the world's biggest chipmaker, said Wednesday that it would spend $2 billion to expand a plant in New Mexico in order to meet the rising demand for its microprocessors.
Investors reacted enthusiastically to the company's afternoon announcement, and Intel's shares closed up 7 5/8, or 7%, at 117 3/8.
Intel underestimated demand for its latest generation of microprocessors, enabling Advanced Micro Devices (AMD:NYSE - news - boards) to snatch some of the company's market share. The plant expansion is an effort to catch up.
The Santa Clara, Calif.-based company plans to add more than one million square feet to the plant, in Rio Rancho, N.M., to manufacture microprocessors on 300 millimeter wafers using technology that enables a transistor to be as short as 0.13 microns. A micron is about 1/100th the width of a typical human hair. A chip, or microprocessor, contains tens of millions of transistors.
Construction will start immediately, and the expanded plant will start operating in 2002.
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Announced in the afternoon and turn the chips around. The 1994 plant built in AZ for 1B helped it smack AMD down at the time.
Jack |
