Home Corporate agenda Intel to shut two plants in Penang

Intel to shut two plants in Penang

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The economic tsunami has reached our shores. Regionally, the numbers look dismal: Singapore is experiencing its worst downturn in post-war years, Korea down over 5 per cent of GDP, Japan exports down 35 per cent, China growth down to 6.8 per cent.

And now Intel is shutting “two existing assembly test facilities in Penang”.  The two plants in Penang are among four Intel facilities worldwide that have been targeted for closure in 2009.  The closures could

Intel Corp’s corporate affairs manager in Penang Loo Cheng Cheng said the two affected facilities, the PG6 and PG7 plants, where manufacturing takes place, were the company’s older and smaller plants.

“We have a total of six plants in Malaysia running manufacturing, research and development and other services.

“With three plants in Penang and another three in Kulim, Kedah, Intel Corp in Malaysia has about 10,000 employees,” she said.

Loo said the closure of the two plants in Penang would affect over 1,000 of employees but the company would be offering the effected workers comparable job positions in its other Malaysian plants.

“It is safe to say that the company has no plans to lay off any workers for now,” she said.

However, it is still unknown when the two facilities will stop its operations in Penang.

Following the move to close the two plants here, the company’s operations in its Kulim Hi-Tech Park site will assume the role as Intel’s global manufacturing hub.

But Guan Eng is denying that the two plants are closing down; instead he says the company had sought relocation of the two plants to the Kulim Hi-tech Park.

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Intel has seen the demand for its processors slow in the last quarter of 2008 as profits plunged by 90 per cent. The firm said it would “consolidate and streamline some older capacity without impacting the deployment of new, leading-edge 45-nanometer and 32-nanometer manufacturing capacity”.

New facilities are being planned for Intel’s new 32-nm chip manufacturing later in 2009, but Penang has not been mentioned in this eWeek.com report:

Right now, those 32-nm processors, code-named Westmere, are being developed at another facility in Oregon, and when those chips are ready for full production, Intel intends to manufacture them at one or more facilities throughout the world. Mulloy said the plants that are being considered for 32-nm production include facilities in Oregon, New Mexico, Arizona, Ireland and Israel.

This clearly shows us the vulnerable and tenuous nature of FDI. The plant closures are proof that even the bluest of blue-chip multinational companies will not hesitate to discard workers the moment their bottom lines are affected. When a global economic recession strikes, jobs are likely to be lost at these MNCs.

Yet, we still do not have a national retrenchment fund to support workers who have lost their jobs. How will the retrenched workers support their families and repay housing loans? “Re-training” schemes are not the solution. The principal beneficiaries are the training institutions, which mushroom when the money is provided but then disappear when it dries up.

It’s time the government moves to strengthen our public sector by investing in key areas such as education, general hospitals, affordable housing, sustainable agriculture, public transport, and renewable energy. These sectors will create more sustainable and meaningful jobs that are unlikely to be lost due to external forces while at the same time providing valuable services for all.

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Ozz Bound
Ozz Bound
25 Jan 2009 12.54pm

G’day, I have always said that Malaysia has to make and market her own products and not rely so much on FDI’s. How can Malaysia berdikari when all it does is to fight over racial allocations and boast of the 12A’s, 17A’s their child has SKORed in so called public examination which makes a parrot looks and sounds stupid. Well I am not about to wait and find out. I have taken my family and myself and we are now residing in Australia where everyone are treated the same and minority are given privileges. Fair Go and Fair Dinkum for… Read more »

anon c
anon c
22 Jan 2009 9.39pm

Excerpt from another news source: “…In a prepared statement Wednesday, the company said the plant closures “when combined with associated support functions, are expected to affect between 5,000 and 6,000 employees worldwide.” Intel spokesman Chuck Mulloy said some of the impacted employees may be offered positions at other Intel facilities, but that at least 5,000 workers would lose their jobs. About 400 Bay Area employees are affected; Mulloy said it’s likely many of them would be laid off. Intel had 84,000 employees at the end of last year. The last time the company laid off workers was in 2006, when… Read more »

Ahmad Ibrahim
Ahmad Ibrahim
22 Jan 2009 8.24pm

This is, in a way, expected. It is widely reported that Intel already had planned to consolidate most of their assembly and test into big sites (ie Vietnam) rather than a number of smaller sites many many months before Mar ’08. The economy downturn and the 90% quarter-to-quarter loss for Intel probably just accelerated the implementation of this plan. As for the eWeek report, it is misleading to point out that Penang is not mentioned. Those sites quoted are actually fabrication sites, which pattern the circuit on silicon. Penang never had this facilities. What Penang does is the assembly and… Read more »

Hanif Zuhdi
Hanif Zuhdi
22 Jan 2009 6.34pm

Closing down factory at Penang is a suddent plan for Intel. They have planned it even before 12GE. Nothing to panic about. Factory in Penang is old and small factory and they have build new and larger facility at Kulim HighTech that just being completed end of 2008. Intel already started to relocate their worker from Penang to the new factory starting mid-2008. Read back, that Intel said they would not lay off worker. Maybe those who reluctant to relocate, unfortunatly will be laid off. I guess, Intel was under preasure not to relocate to Kulim by Previous and Current… Read more »

Sam Gopal
Sam Gopal
22 Jan 2009 5.19pm

Guys! Guys! Guys! Stop getting emotional. In Intel and related industries understand that the products and technology life cycles are very short. I have worked and I continue to work in this field. Nothing to do with Gerakan, UMNO or BN. In Intel, they will always have 2 plants in various countries producing the same product as part of their risk management. Also no site can contribute more than 30% of total revenue Next technology changes so fast that they have to change the entire equipment set up as we get into new technologies. A no of times Intel had… Read more »

Obama Supporter
Obama Supporter
22 Jan 2009 4.29pm

i think it is not right to blame LGE. All this should have been planned for by diversifying the penang economy by the Koh Tsu Koon and BN govt when they are in power. The idea that penang can continue to be a manufacturing sweat shop state and you have lack of touch association like the ACCIM (which suggested over the star paper that we should invest more in manufacturing) is going to lead penang and malaysia to even more problems in the future. this country is no longer a manufacturing country. it cannot support the basic economics of manufacturing… Read more »

Anon
Anon
22 Jan 2009 4.17pm

Lim Guan Eng is in denial mode. It it time he give Jeff Ooi a kick in the butt for sleeping on the job.

jughead
jughead
22 Jan 2009 3.45pm

Closed down? What big news? State Government not doing alright? Sinkapore even worse but it looks as if no one wanted to make a comparison with a country that is more ahead than Penang. It is time for Penang to diversify its economy.

K
K
22 Jan 2009 2.42pm

Jeff Ooi’s pre-GE prediction is coming true….

But no worries, LGE is a magician who can attract FDI like a magnet and in no time will replace the lost investment due to Intel. In meantime we can start to take bets on the next investors leaving Penang….

Obama Supporter
Obama Supporter
22 Jan 2009 2.42pm

I disagree with what you write Netto on the last paragraph … what this country need is to become a economic power where we create our own jobs that means entrepreneurship in all forms of industry and go out there and fight it out…. all that you have mentioned is about spending money and creation of skills and social upgrade it has nothing to do with bringing money and while we still argue of english for science and maths …where you think this will take us… govt should encourage people to go into entrepreneurship in modern areas and use the… Read more »

chong
chong
22 Jan 2009 2.08pm

bring down the petrol price!!! bring down the goods & food price!!!

blood sucker gomen!!!

sinyc
sinyc
22 Jan 2009 1.42pm

http://www.themalaysianinsider.com/index.php/malaysia/16541-guan-eng-denies-intel-closing-penang-plants

Guan Eng denies Intel closing Penang plants

…..He clarified that the company had sought relocation of its two factories to the Kulim High-tech park, but admitted the company could be offering voluntary separation schemes to its employees…..

….Intel, in a statement from Santa Clara in California yesterday, said it plans to close two existing assembly test facilities in Penang and in the Philippines….
which report is correct?

sabahan
sabahan
22 Jan 2009 1.37pm

Good time come Foreign companies earned tons of monies. Bad times come they discarded worker by thousands. Some workers need money to feed their family and paid their fixed expenses. In Malaysia there is no minimum wages law imposed, so some of the workers wages are chicken feet. No saving and others fund to help them. Where is the social responsibility from these big companies? And all the elected YB during this coming Chinese New Year when you started to lust with your “YEE SHANG” and expensive “ikan bawal” please think of a solution of how to help your fellow… Read more »

Leithaisor
Leithaisor
22 Jan 2009 1.35pm

Bernama posted an item “Guan Eng Denies Intel Closing Penang Plant” at 12:24pm today.

URL:
http://www.bernama.com/bernama/v5/news_lite.php?id=385314

Apparently Intel is seeking relocating of the 2 plants to Kulim but “the state government has yet to receive any official letter on the relocation from Intel”

Sunny
Sunny
22 Jan 2009 1.26pm

Good times are over. I hope our gomen wakes up soon.

johanssm / khun Pana
johanssm / khun Pana
22 Jan 2009 1.16pm

I guess this news will make people like mahathir and those who wants to boycott American products very happy!. 5000 workers without job can means risking another 50000 losing their jobs.When a giant size factory shuts their door this means workers from other support sectors such as buses , food vendors , office material suppliers , shipping , agents , insurance ,banks , advert firms, etc etc will be affected as companies of such size contributes indirect jobs as well. This is not peanuts sum game and bn govt is still in a denial mode. We will have to wait… Read more »

Han2
Han2
22 Jan 2009 1.03pm

The leadership is too engrossed in party elections in March so could you pls. re-post this thread again in April? Right now the folks at Putrajaya has no time to manage and administer the economy / country. In any case, Penang is under Pakatan Rakyat state govt., so please leave us Putrajaya alone will ya…?

CWI
22 Jan 2009 12.47pm

This is one of the impacts of voracious character of free market system that rooted in profits. And now the global economic slowdown is clearly reveal the limitation of the system. This show the need to fight for a democratic socialist society based on the needs for the majority, the workers and their family.

Andrew
Andrew
22 Jan 2009 12.47pm

Intel Santa Clara says they are closing down two plants in Penang. Our ‘superman’ CM Lim Guan Eng denies this is happening and then goes on to waffle that it’s really just relocation. Hulloooo? What planet are you on LGE? You think you could come back to planet Earth and land on Penang Island? No wonder Penang is going nowhere under your birdbrain and diconnected leadership. If you had a more creative economic mind, you would be able to work out solutions instead of just clamouring after footloose FDIs. But you cannot. And so, Penang is ill-served by your lack… Read more »

amoke
22 Jan 2009 12.44pm

Oh, we are immune.
We does not need intel, since it is American. We boycott and make a lot of noises about Islam being trampled upon.

To the eyes of UMNO government, this will be a non issue.

koolgeek
22 Jan 2009 12.22pm

i know what the UMNO/BN goons will say, “You see? This is the consequence of not voting for us!”

lanwm
lanwm
22 Jan 2009 11.50am

bye intel

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