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January 15, 2014

Intel's Fab 42 Plant in Arizona to Stay Closed

It hadn't even opened yet, but already, folks like President Barack Obama were pointing to Intel (News - Alert)'s Fab 42 facility, set to open in Chandler, Arizona, as a sign that the United States hadn't given up on manufacturing things just yet. It was scheduled to open in late 2013, but new reports say that not only is that date a clear wash, but it won't be happening any time soon to follow, either.

The new reports suggest that Fab 42 will stay quiet, though other factories at the same site will get some upgrades instead. Meanwhile, the completed Fab 42 facility will instead be “left vacant for now and it will be targeted at future technologies,” said Intel's Chuck Mulloy, while talking with Reuters (News - Alert). Original reports suggested that the Fab 42 facility was going to be geared toward ultra-small processors, 14 nanometer affairs that boasted transistors so very small that a pin's head could accommodate over 100 million such transistors. But the necessary equipment to create such processors has yet to be installed, and may not be for some time.

Indeed, Mulloy went on to note that several Intel facilities that used to work in 22 nanometer were being slightly retooled to allow for 14 nanometer production. Many employees Intel had recently hired were working in those facilities, and Intel had actually hired sufficient new employees to receive state tax benefits, beating a planned target of 1,000 employees since 2011, when construction on Fab 42 started.

Part of the issue, some suggest, is the ongoing decline in overall PC sales. PC makers from Dell to Acer (News - Alert) have seen declines in sales of late as fewer laptops and desktops are sold and more tablets and smartphones emerge to take the places formerly held by the other devices. With Intel expected to report revenues that are flat overall compared to the same time the previous year, it's clear that more production from Intel isn't exactly likely. With plans afoot to start expanding to 450 millimeter wafers, Intel—and others like Samsung (News - Alert)—are likely to save a little cash in manufacturing while still providing increased power thanks to the ability to get more chips on a wafer.

While the “post-PC era” that we've heard so much about ever since before the passing of Steve Jobs (News - Alert) hasn't really materialized, it's clear that the PC's golden age is, indeed, largely over. The PC is now left to share space, attention and resources with other devices that are drawing users' interest; console gaming is encroaching on PC gaming, smartphones and tablets do likewise but also take a slice of the  productivity sector. The idea that there will be no more use for a PC isn't likely to happen for some time—the PC simply has too many uses to be completely lost—but PCs are likely to not only lose more ground, PCs are also likely to never see the levels formerly held.

Intel, meanwhile, is clearly positioning itself for a future where the PC is less important than it was formerly. That doesn't exactly mean great things in terms of new factories and hiring, but as Intel offers more chips, smaller chips, it may well mean better job opportunities down the line. Small comfort for those who were hoping to work at Fab 42, granted, but it's something.

Edited by Cassandra Tucker

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