Intel Still Not Opening Fab 42 In Chandler

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According to azcentral.com “Intel says factory to stay shut for now

Intel has confirmed it is leaving vacant a massive new multibillion-dollar computer-chip factory in Chandler that President Barack Obama once touted as a symbol of the future of U.S. manufacturing.

No employees are working in the facility, known as Fab 42, which was completed late last year and was to bring 1,000 jobs and a $5.2 billion company investment.

Don’t worry, the Intel Spokesperson puts a positive spin on the news.

“It doesn’t matter which building they work in; we’ve already increased the workforce by more than 1,000 people at that work site,” Mulloy said.

There’s an interesting note from PC Mag “Intel Scraps Plans to Open Cutting-Edge Arizona Chip Plant

The chip giant received $3.3 million in state tax credits from Arizona for creating about 1,000 new permanent jobs with Fab 42, the Arizona Republic noted in a report breaking the news that the facility has been put on permanent hiatus.
Intel has in fact kept its end of that deal, adding more than 1,000 new workers to its payroll in the state—they just work at other Intel manufacturing facilities in the area, according to Mulloy.
Intel is painting its decision not to open Fab 42 as a simple matter of finding a more efficient means of getting to 14nm production at existing facilities. But it’s hard not to see the impact of a slumping PC market on this development—Gartner recently characterized the double-digit drop in PC shipments in 2013 as the “worst decline in PC market history.”

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HP In Alpharetta Costs Rio Rancho Jobs

HP Facility in Rio Rancho, NM

In 2009 HP took the jobs from Colorado Springs to open a customer support center in Rio Rancho. HP is taking 200 of those jobs and moving them to Alpharetta, Georgia. From the Rio Rancho Observer “HP cutting 25% of local workforce“.

Hewlett-Packard is moving almost a quarter of its Rio Rancho positions to Georgia.
HP spokesman Michael Thacker said the corporation is moving about 200 local jobs in the Customer Solution Center to Alpharetta, Ga. The announcement was made Monday.
Rio Rancho employees may or may not move with their jobs, he said. HP will decide who moves and keeps their jobs, but Thacker said specifics weren’t available yet.
Mayor Tom Swisstack said the positions would be moved by Oct. 31.
“That’s a hard hit, a hard transition for the city,” he said. “Their average jobs paid about $50,000 a year.”

HP will have to pay the city as part of a clawback provision.

HP must pay a penalty each year it fails to meet its employment requirement from now until the end of the 15-year agreement. The size of the penalty is determined by multiplying the average shortfall throughout the year by the annual value of the incentives.
For example, if HP maintains its current level of 860 full-time equivalent employees this year, it will owe the city $53,715.08 next January.

HP will have to pay Rio Rancho roughly the cost of a yearly salary for one employee. I’m sure that will be covered by one of HP’s layoffs.

What’s bad for Rio Rancho is good for Alpharetta. At no time has HP actually created any new jobs.

ArsTechnica On Intel Making Batteries

I love ArsTechnica, but I have to question part of an article that Jon Stokes wrote today about Intel making car batteries.

I bring this up because Intel doesn’t actually make as many chips over here as they used to. Most of the company’s sales are overseas (Asia is the biggest market), so that’s where a large and growing percentage of its workforce is, as well. The company’s pronounced shift in moving jobs abroad has been a sore spot for American Intel employees over the past decade, but I hear that, internally, the Intel top brass makes no bones about the fact that they have no qualms about moving the plants closer to the customers.

I am employed by Intel in the manufacturing side of their business. I don’t pretend that I know everything that is going on but I’m pretty sure this part of the article is incorrect. Most of Intel’s manufacturing is in the United States with the rest in Ireland and Israel. The only Asian capacity is in China and it hasn’t finished construction.

I also don’t know anything about Intel replacing manufacturing capacity in the US with factories outside of the US. My opinion: It costs billions of dollars to build a factory, Intel isn’t about to move capacity from existing locations to overseas unless there’s economic reasons to do so and highly skilled worker base. Just because the customers are there doesn’t seem like a good enough reason.

As far as Intel making batteries? I have to agree with the rest of the article. It’s better if Intel invest in battery tech R&D rather than try it themselves. Not that I wouldn’t love to see Intel broaden out in other ventures. Intel has failed at every attempt to make non microchip businesses (see LCOS and the watches they made that I can’t find a link to) as profitable as chips and top management knows that.