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Intel Postpones Expansion Plans

January 18, 2001

HILLSBORO, Ore. (AP) _ Intel has indefinitely postponed construction of a $400 million research and development campus in Oregon, citing weaker demand for computer chips.

Intel’s largest division is in the western suburbs of Portland known as the ``Silicon Forest,″ employing about 15,000 people. The new site would have added another 7,000 workers.

``It’s not a good thing for the folks in Oregon, but it’s hardly avoidable,″ said Jonathan Joseph, an analyst with Salomon Smith Barney. ``It’s painful, but it’s probably a step that they had to take.″

An Intel spokesman said the company’s cost-cutting measures would not affect other announced construction projects or any of the company’s manufacturing operations in Oregon.

The Santa Clara, Calif.-based chip giant’s decision followed disappointing earnings reports from nearly every personal computer manufacturer. Computer sales worldwide have slowed faster than industry experts had anticipated.

Intel’s fourth-quarter earnings report, released Tuesday, beat analysts’ lowered expectations, but the company warned of a bleak first quarter and predicted sales would fall 15 percent from the previous quarter.

For its fourth quarter ended Dec. 30, the company reported net income of $2.6 billion on revenues of $8.7 billion.

``We operate in a cyclical business, and right now we are experiencing an across-the-board slowdown that’s impacting the entire high-tech sector,″ said Intel spokesman Bill Mueller in Folsom, Calif.

Shares of Intel rose $1.69 to $32.19 at the end of regular trading Thursday on the Nasdaq Stock Market.

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