Intel Cutting 1,000 Jobs At New Mexico Wafer Fab Plant

Rio Rancho plant will switch to producing 300-millimeter wafers; market demand and automation cited as reasons for job cuts.

RIO RANCHO, N.M. (AP) - Intel Corp. announced Tuesday that job cuts at the Rio Rancho plant's Fab 11 unit are expected to number more than 1,000 as the company closes out production of an older silicon wafer technology.

The 200-millimeter wafers will stop being made at the plant by the end of August and affected employees will be offered severance packages or they can search for other jobs within Intel, spokesman Jami Grindatto said.

''Both options give you a great package, a competitive package,'' he said. ''It's based on years of service.''

Grindatto said some of the employees who will be affected by the cuts have worked for the company for 25 years while others have just a year at the plant. He added that the exact number of job cuts that will result from the end of production at Fab 11 is unknown.

While it's reality that Intel must downsize to remain competitive, Gov. Bill Richardson said Tuesday that he's sensitive to New Mexicans who now face an uncertain future.

''Fortunately,'' he said, ''New Mexico is well positioned to absorb Intel's displaced employees. The state's unemployment rate is at a record low and the manufacturing sector, particular in the Albuquerque area, remains quite robust.''

Grindatto said the 200-millimeter technology has become obsolete, and the Rio Rancho plant's Fab 11X will focus on manufacturing the 300-millimeter wafers that are in higher demand.

Fab 11X began production in October 2002 and was Intel's first 300-millimeter high-volume, fully automated manufacturing facility.

Grindatto pointed out that market demand for products played a role in the job cuts, but a more automated process also means fewer workers.

''We're able to produce more per employee,'' he said. ''It's about how innovative we are and how productive we can be.''

Santa Clara, Calif.-based Intel announced earlier this year that it was investing $1.5 billion to upgrade Fab 11X so it will be able to produce chips with circuit lines 45 nanometers thick, nearly half the size of current chip technology. It's the company's next generation manufacturing process.

Grindatto said the company has kept workers informed as it moved toward ending production at Fab 11 so they could plan for the job cuts and minimize their effects.