Intel has warned the workers at its Fab 11 plant in Rio Rancho, New Mexico, that it could lay off as many as 1,000 of the 1,500 employees when it stops producing flash memory chips at the outdated fabrication plant this August. The company invited those workers to seek another job at Intel or take a severance package including job search training. Intel will continue to sell 135nm flash chips made at other factories, but sees rising demand for memory chips made with smaller, more efficient components, such as the 90nm chips already in production and 65nm chips Intel is beginning to sample. The company also showed prototypes last month of PRAM (phase-change RAM) technology, a potential long-term replacement for both flash memory and DRAM.
Intel has been losing money for years on its flash drives – the division lost $283 million on revenue of $469 million during the first quarter of 2007, compared to a loss of $125 million on revenue of $544 million a year earlier. "We've been working hard to get the flash business profitable. So we made the decision to curtail production of our 135 nanometer products. This relates to bringing our costs under control because there is not sufficient demand to support that production," said Intel spokesman Chuck Mulloy.
News source: InfoWorld