Lagging Demand Forces Delay of Intel Chip Plant

Intel Corp. said it is postponing the opening of a $1.3-billion Texas semiconductor plant by a year because of lagging demand for memory chips, forcing it to shift to other chips more in demand.

Intel now plans to open the plant in 2000, not 1999, spokesman Howard High said.

High said the delay is because of slack demand for flash memory chips, which Intel disclosed in its third-quarter earnings announcement earlier this week. Intel will shift production at an Israeli plant from memory to logic chips, which are in higher demand. That means it won’t need the Fort Worth logic-chip plant as soon as planned, he said. “You have a matching of capacity coming on line, and that pushed back the need for the Fort Worth plant,” he added.

Intel shares fell $1.88 to close at $80 on Nasdaq.

High said Intel still plans to spend $4.5 billion on capital improvements.