Intel Cuts Jobs, But Builds Fabs

Intel's new $2 billion manufacturing facility in Rio Rancho, New Mexico, is slated to open in late October.

Despite plans to cut 4,000 workers during the second half of 2002, Intel continues to forge forward in Europe with recent announcements including resumption of construction of a $2-billion manufacturing facility in Ireland and an agreement to conduct microprocessor research at a university in Spain.
        Intel is experiencing the most severe job loss since the company closed its Puerto Rico facility in 2001, with 1,300 left looking for other employment. No. 2 chip maker Advanced Micro Devices has also suffered major losses, citing in part a weak market in personal computers. Low numbers from Apple Computer confirmed that trend. Technical part maker Parker Hannifin, based in Cleveland, Ohio, will cut up to 1,000 jobs at plants in Asia and California because of the semiconductor sales slowdown. Meanwhile, Motorola has announced another 7,000 job cuts, but is now rebounding in profitability based in part on offering a wider array of chip products than its competitors.
        Intel's Fab 24 in Leixlip, County Kildare, Ireland, will produce advanced semiconductor components on 300-mm wafers and initially use 90-nanometer process technology. The new fab will contain 160,000 sq. ft. (14,864 sq. m.) of cleanroom with slightly more than 1 million sq. ft. (92,900 sq. m.) of space for the total facility. Operations are expected to begin in the first half of 2004. When the new facility is completed, the company will have four 300-mm wafer fabrication facilities in operation.
        Manufacturing with 300-mm (12-in.) wafers dramatically increases production of computer chips at lower cost compared with the current standard 200-mm (8-in.) wafers. The total silicon surface area of a 300-mm wafer is 225 percent (or more than twice) that of a 200-mm wafer, and the ratio of printed die (individual computer chips) is increased by 240 percent. The bigger wafers lower the production cost per chip while diminishing overall use of resources, using 40 percent less energy and water per chip than a 200-mm wafer factory.
        The new fab will also incorporate Intel's recently disclosed 90-nanometer process technology. In March the company announced that Intel researchers had built the world's smallest SRAM memory cell using this new technology.
        Construction on Fab 24 was originally begun in June 2000 but was halted during last year's worldwide economic downturn. When completed in 2004, the fab will employ 1,000. There are currently 3,150 Intel employees in Leixlip. During construction, Fab 24 will be the largest single construction project in Ireland. Additionally, Intel's cumulative investment in manufacturing facilities in Ireland at the end of 2004 will total more than $5 billion.
        Intel also announced an agreement to conduct microprocessor research and development at the Universitat Politècnica de Catalunya (UPC) in Barcelona, Spain. Under the terms of this agreement, UPC will operate a research center, Intel Labs Barcelona (ILB), on behalf of Intel.
        As part of this relationship, Intel, which has been funding university research since 1980, will open a research facility on the UPC campus in Barcelona, Spain, later this year. The center will help expand Intel's capabilities in microprocessor research and development.

Intel RE Manager Oversees 43 Million Square Feet

Sunil Das, worldwide real estate manager for Intel Corp., based in Chandler, Ariz., manages a global portfolio of some 43 million sq. ft. (4 million sq. m.). He has been instrumental in developing new practices and procedures, implementing creative financing techniques and formalizing new relationships with service providers worldwide.
        "Silicon is the word," Das told a corporate real estate outsourcing workshop in May. "We design, manufacture and build complex silicon devices, and as the world becomes increasingly connected, our product offerings are expanding to support the Internet transformation. Our production facilities are primarily in the U.S., except for Ireland and Israel."
        Das says time to market is a key real estate driver for Intel, especially for manufacturing facilities.
        "If it's manufacturing, timing is very, very important," Das says. "It's imperative that we get the factory built on time, start making products and shipping them out. Otherwise it costs us millions of dollars a day. From a manufacturing standpoint, costs come in second, and timing is the number one driver. Sometimes, if you have to pay more to get the job done on time, then that's what we do."
        Das says the Intel Real Estate Group is responsible for strategic planning, transaction management and asset management.
        "M&A integration is part of our responsibility, for a simple reason," he says. "Last year we acquired 25 companies, so you really need a group like that. This year, our record will not be 25, I can assure you of that. Being a global company, it is virtually impossible for me to manage facilities in China. We have regional groups responsible for facility management. We are constantly evaluating if this is the right thing do to. In Asia, we will go ahead and let a supplier manage a property for us, but in the U.S. we manage it on our own. I think the suppliers have become better now, and we're looking at this again. One can outsource everything if he wants to."