Intel to Close Shanghai Plant

Shanghai Daily reports:

INTEL Corp plans to close its assembly and test plant in Shanghai and move those operations to a lower-cost region - a move that will affect 2,000 employees.

Even as it reins in operations in the city, the world's biggest chip maker also said yesterday that it will increase its registered capital in China by US$100 million for future expansion. Details on how the investment might be used were not revealed.

Built in 1994 with an investment of US$500 million, the Shanghai assembly facility was the company's earliest plant in China. The chip maker said it will close the local factory over the next year and move its operations to existing facilities in southwest China's Chengdu City.

The Santa Clara, California-based company said the move was made to accommodate "recent economic conditions."

As consumers scale back spending in the wake of the global financial turmoil, sales of computers, phone handsets and flat-panel TVs - all powered by semiconductors - have plummeted.

Last year, revenue for China's integrated-circuit market grew only 5 percent to 130 billion yuan (US$19 billion), compared with 25 percent expansion in 2007, according to CCID Consulting, a Beijing-based research firm.