Intel boosts investment in Philippines

Intel, the world’s top semiconductor maker, said it will invest $80 million to $100 million this year to upgrade the technology of its test and assembly facility south of Manila. The investment and consolidation exercise will upgrade the facility in Cavite to support Intel’s current-generation Pentium 4 line and other microprocessors, the company said. The company also said it will shift test, assembly and manufacturing operations to the Cavite plant from one in Makati in the Manila area, about 60 kilometres away, and will phase out production of older products.

Spokeswoman Chit Ventura said it is possible that jobs could be lost as a result of the consolidation, but said it was too soon to know how many. About 4,500 people currently work at Intel’s Cavite plant, while 1,500-2,000 work in Makati.

While some cost savings will be generated by shifting production to Cavite, Intel said savings could not immediately be quantified.

Intel noted that Philippines president Gloria Macapagal Arroyo has encouraged businesses to shift operations away from the congested metropolitan Manila area. California-based Intel said several functions will remain at Makati, including sales and marketing, call centre operations, and design of flash memory chips.

Intel said the additional funding brings its investment in the country to $1.3 billion, and makes the Philippines the firm’s biggest assembly and test site.

Intel posted fourth quarter profits and revenue that exceeded Wall Street forecasts, although the company said it did not see signs of economic recovery following the worst year in the chip sector’s history, and said capital expenditure for 2002 would fall by 25 percent from $7.3 billion in 2001.

Reuters