Intel announces $7bn cash for chip plants

Posted on 11 Feb 2009 at 09:17

Intel, the supplier of processors for Apple's computers, has announced that it is to invest $7 billion in its US fabrication plants.

The money will be used to upgrade the facilities and increase capacity, in preparation for a recovery in the US economy.

"You never save your way out of recession. You invest your way," said Intel spokesperson Chuck Mulloy, announcing the company's plan to manufacture the new chips in larger volumes than previously planned in order to get them into mainstream products quicker.

The announcement coincided with the news that US president Barack Obama won approval for his $838bn economic recovery plan.

Intel’s investment will be drawn from its $12 billion cash pile and Intel chief executive Paul Otellini urged other tech companies with similar reserves to follow his lead.

Apple also has cash reserves in the region of $12 billion, but has given no indication whether it intends to dip into this pot. Some have suggested that it should use it to shore up a stock price that halved over 2008, though it has rallied in the past couple of weeks following the announcement of another set of record financial results.

But its position can only be strengthened by Intel’s commitment to new investment, which should hasten the introduction of faster, lower-powered and hopefully cheaper chips for Macs.

Author: Simon Aughton

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