Intel Corporation (NASDAQ:INTC), the world’s largest chip maker, announced today that it would close its chip manufacturing facility in Hudson, MA. The closing will eliminate up to 700 high-paying manufacturing jobs in one of the largest job cuts to hit the state in recent years.
Intel Corporation (NASDAQ:INTC) said on Thursday that its plant in Hudson is using outdated technology to make older generations of computer chips used in low-end applications, which do not generate as much profit as its higher-end microprocessors that are used in PCs.
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Intel’s Hudson facility out-of-date
“The facility and the site do not meet the requirements that we need,” said Intel spokesman Chuck Mulloy.
“The company has determined that this kind of manufacturing capacity is not required for its long-term business needs,” Mulloy added.
The Maynard factory was originally built by computer maker Digital Equipment Corp. and obtained by Intel Corporation (NASDAQ:INTC) in 1998 as part of its acquisition of DEC’s chip assets following a patent infringement lawsuit.
Quite simply, the factory does not produce more sophisticated microprocessors, like the Core, Xeon and Atom chips, which are Intel’s best-known and most lucrative products leaving the plant the odd man out if you will.
Intel hoping to integrate some workers into other jobs
Intel Corporation (NASDAQ:INTC) iterated that 100 workers would be laid off in the short term but that the remainder of the workforce would stay on as the factory works at full capacity until its closing. All workers will be offered a severance package, but Intel is also open to keeping on these employees if they can be integrated into other jobs within Intel’s chip making infrastructure.
The plant has no choice but to remain working at full capacity until its closed. Existing orders still need to be filled and Intel also needs to build up its inventory of these obsolete chips that will no longer be made once the Hudson, MA plant is closed for good.
While this is clearly a blow for the area, there remain a few positives for Hudson. Intel Corporation (NASDAQ:INTC) operates a research and development facility in Hudson which employs an additional 850 workers. This facility will continue in operation and its workers will not by affected by the job cuts in any way.