|
INTEL
Philippines Inc., the country’s largest semiconductor
exporter, will close its factory in
Cavite City,
a company senior executive confirmed to the
BusinessMirror.
“There’s
a ramp-down of a product, the manufacturing of which
would be transferred to China,” the official, who spoke
on condition of anonymity, said.
The
executive said Intel was “given six months to leave the
building.”
The
official added Intel would transfer the manufacturing of
its central processing unit—a computer’s brain—to its
Shanghai,
China,
hub. The information bolsters speculation that the
pullout might not be limited just to the Cavite plant.
In an
official statement, however, the company said it wished
to “reiterate that it has made no decisions on this
matter [its Philippine operations] and is currently
exploring multiple options.” It said it had “updated”
employees that “significant investments would be
required to ensure the long-term viability of its
factory building in
Cavite,”
a statement seen as signaling a problematic situation in
the Cavite plant.
The
BusinessMirror source said, meanwhile, “There’s still no
announcement on what will happen to the employees.”
Intel’s
10-year-old factory employs about 3,000 workers.
“The
typical process would be giving each of them a
‘volatile’ separation pay,” the source said, explaining
that this is a flexible compensation package.
“They
couldn’t be absorbed but some of them may be offered a
stint in other countries where Intel operates,” the
source added.
Aside
from China, Intel also has manufacturing operations in
Malaysia
and Vietnam.
The
announcement to employees of the “ramp down” last week
led to fears that the high-tech company would totally
dismantle its 32-year-old operations in the Philippines.
Five
years ago, Intel invested up to $100 million more to
upgrade its Cavite chip-assembly plant, bringing its
total investment in the Philippines to $1.3 billion. It
is the country’s largest exporter of microchips and
semi-conductors.
The
source told the BusinessMirror, however, “there’s still
no official talks about that [total pullout of Intel].”
“I
sincerely hope it doesn’t get to that stage,” the source
added.
An Intel
study four years ago showed that the company’s
Philippine operations generated 0.3 percent of the
country’s gross domestic product.
Intel’s
General Trias,
Cavite
plant, its main hub, reportedly accounted for 22 percent
of all of Cavite’s exports in 2004. The plant’s closure
follows Intel’s shut down of its Makati City center last
year, purportedly to consolidate the company’s assembly
and test facility in Cavite.
The
source added that high power costs and the weakening US
market were some of the reasons cited for the “ramp
down.”
Intel
Philippines country manager Ricardo Banaag couldn’t be
reached for comments. |
