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Intel reportedly puts Fab 42 plant on ice

Intel has put its $5 billion investment in an Arizona chip plant on hold, but says it has nonetheless hired more than 1,000 new people to work at the Chandler facility. The “Fab 42” plant, as it was called, was set to start producing chips using Intel’s 14-nanometer process this year. But Intel’s customer wins in mobile have not come quickly enough to make up for slumping PC sales, and the company has reportedly scaled back its plans.

President Barack Obama visited the Chandler, Arizona plan during his 2012 campaign to make a call for more tax incentives for technology companies. Intel had received incentives from Arizona, and says it has fulfilled its obligation to hire more than 1,000 people. Many of those people work at the existing Chandler chip plant. Although Intel is not currently buying new equipment to make 14-namometer chips there, it is converting some its 22-nanometer manufacturing resources at Chandler in order to produce the smaller chips. Smaller cuts in the silicon mean that more chips can be produced from one piece of silicon, and that more chips can fit into the small form factors of mobile devices.

Another way to get more chips from a single piece of silicon is to use bigger wafers, and Intel is moving forward with an investment in this technology. The company is expanding an Oregon plant to produce chips from wafers measuring 450 millimeters across. That’s about 50% bigger than the largest wafers currently in use.

Intel has been playing catch up in the market for mobile processors as chipmakers who license ARM’s power efficient designs have dominated. Recently Intel has signaled that it may be looking beyond smartphones and tablets, hoping to get an early start supplying connectivity for other types of devices. At CES 2014, Intel demonstrated a smart watch that does not require a connection to smartphone or tablet, as well as earbuds with a heart rate monitor and a headset with a digital voice assistant.

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Martha DeGrasse
Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.

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