Intel Corp. to delay new Fab 42 in Arizona

The largest chipmaker in the world – Intel Corp. officially announced that has decided to delay the opening of new factory in Arizona. The company explained that the main reason for this decision is the fact that its main source of revenue – the demand for personal-computer microprocessors has sharply decreased.

Chuck Mulloy, who is a spokesman of Intel, explained in a telephone interview on Tuesday that the Chandler plant, which is also called Fab 42, is completed, but is has not been filled with chipmaking gear. He said: “The new construction is going to be left vacant for now and it will be targeted at future technologies.”

The company took a decision to upgrade other three of its factories located on the same place, because they can use the already existing equipment. The factories that already exist at the Chandler site use Intels previous generation of manufacturing. The spokesman of the company announced: “The newer fab has not been equipped with the capital equipment. It has heating and air conditioning but the actual tools, the expensive stuff, are not in there. It boils down to better capital utilization.” Mr. Mulloy also explained that the total output of Intel Corp. would not be reduced by the delay of the plants opening, which was officially planned for the end of 2013.

The original idea of the company was to install its most advanced manufacturing technology at the plant and make 14 nanometer microchips with miniature transistors.

Currently, Intel Corp. is considered to make about two thirds of its microprocessors production in the U.S. The company has chipmaking plants in Oregon, New Mexico, Ireland and Israel. The main source of sales of the company are computer processors. However, according to IDC Corp., the company underwent through its sharpest annual sales decline on record in 2013, when the PC shipments of Intel fell 10%. The researcher expect the decline to continue and forecast a 3.8%-drop in unit sales.

According to CNN Money, the current share price of Intel Corp. is 3.96% up, and its one-year return rate is 2.14% up. The 38 analysts offering 12-month price forecasts for Intel Corp. have a median target of 24.00, with a high estimate of 32.00 and a low estimate of 16.00. The median estimate represents a -9.47% decrease from the last price of 26.51.