Intel Plans Foreign Plants to Meet Demand for Chips : Computers: Matsushita says it is also expanding its operations to keep pace with surge in business.
Intel Corp., the world’s largest maker of computer chips, said Friday that it will build new plants in Israel, Ireland and Malaysia at a cost of more than $3.1 billion to meet an expected surge in demand.
Meanwhile, Matsushita Electric Industrial Co. announced that it will spend more than $600 million to expand a plant in Puyallup, Wash., and will build a new factory in Indonesia as part of its strategy to nearly double chip production by the beginning of the next century.
Construction in Washington state will begin in April, said a spokeswoman for Matsushita, Japan’s biggest consumer electronics company.
The plans by Santa Clara-based Intel, which company executives have discussed previously on an individual basis, underscores the feverish pace at which semiconductor makers are expanding capacity to keep up with demand from personal computer vendors and other electronics companies and to update technologies.
“Industry experts are predicting that personal computer sales will reach 100 million units per year before the end of the decade,” said Craig Barrett, Intel’s executive vice president and chief operating officer. “We are taking steps to assure that Intel will be able to meet the demands of the rapidly growing market.”
In fact, demand for chips extends far beyond PCs, to hand-held devices, “smart” cellular phones, cars, home electronics and other applications. The average U.S. household has about 25 microprocessors, by some estimates.
Intel is also currently expanding its plants in Arizona, California, New Mexico and Oregon--areas that have been dubbed “silicon forest.”
The $1.6-billion semiconductor plant in Israel and $1.5-billion facility in Ireland will be the largest foreign investments in either nation.
Intel said production of memory chips for computers at the Israeli facility would begin in 1998, with $1 billion in annual output, all designated for export.
Intel’s plant in Ireland represents the single biggest foreign investment since the republic’s founding seven decades ago.
Intel fell 87.5 cents to $67.125 on the Nasdaq stock market.
