Intel to close its last plant in Silicon Valley, other sites

Intel Corp. said Wednesday that it would close five older plants that employed as many as 6,000 people, including its last factory in Silicon Valley, as the world’s biggest chip maker coped with a worldwide recession.

Intel will close a factory at its headquarters in Santa Clara, Calif.; a plant in Oregon; and assembly and test facilities in Malaysia and the Philippines. Some workers affected will be offered positions elsewhere in the firm, Intel said.

A reduction in demand for PC chips has forced Intel to run its factories below capacity, making them less profitable. Last week, the company reported a 90% drop in fourth-quarter net income. Intel may struggle to be profitable in the current period, Chief Executive Paul Otellini told employees.

The closure of the Santa Clara facility would mean the company that helped give Silicon Valley its name no longer makes chips in the area. Intel was founded in 1968.

Intel shares rose 40 cents, or 3.1%, to $13.26.

The closures won’t slow down a shift to more advanced manufacturing technologies, Intel said. The company has its most modern plants in New Mexico, Oregon, Arizona, Israel and Ireland.