Page last updated at 09:29 GMT, Thursday, 22 January 2009

Intel shedding up to 6,000 jobs

Intel headquarters in California
Intel has been hit by the global fall in computer spending

Chipmaker Intel is closing five plants in the US and Asia, with the loss of between 5,000 and 6,000 jobs, as it responds to falling computer sales.

The facilities to close are its factory in Santa Clara, California - its last in Silicon Valley - and sister sites in Oregon, Malaysia and the Philippines.

Intel said the two US factories were based on older microchip technology.

The announcement comes a week after Intel reported a 90% fall in profits for the last three months of 2008.

Intel's profit for the quarter totalled $234m (160m), down from $2.3bn a year earlier.

In addition to falling computer sales, the firm said it was being affected by the growth in popularity of super-small laptops, known as "netbooks", as they use lower profit margin smaller and slower chips.

'Good step'

Intel said the decision to close the five plants - including two sites in Malaysia - would not affect continuing investment in its more modern manufacturing facilities.

"The market will welcome these actions - this is absolutely a good step," said Doug Freedman, a computer analyst with Broadpoint Amtech.

Taiwan Semiconductor Manufacturing, one of Intel's smaller rivals, also announced on Thursday that it was being hit by the global fall in demand for computer products.

It reported a 64% fall in quarterly profits.

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