Intel on its way out of the Philippines

January 2009 Breaking News!: Intel facility closure worldwide

• Intel closes Malaysia, Philippines, Oregon & California Operations
• Intel to shut down Cavite facility by year-end

First, it was Intel Makati that closed down. Then, Intel Philippines sold its flash division. Early April of 2007, Intel announced a $2.5PHP 147INR 212EUR 2CNY 18 billion fab in China — that paved the way for speculations that it’s leaving the country.

Today, Eugene got wind of an imminent closure from purportedly existing employees of the Intel, Cavite plant.

From comments on the blog, there are claims an internal memo circulated yesterday that Intel is definitely moving out of the Philippines. Actual reasons vary — from high corporate taxes, to expensive electricity charges and even stealing of microchips. Our source says it’s about the structural integrity of the Cavite plant (that’s why the Laguna TechnoPark was an option).

As of this posting, I received an email from a former colleague who works at Intel Cavite and they were already informed yesterday that they are closing down the site in 6-9 months. I feel sad about this news since i knew a lot of people over there who are really good and now they need to find work. {comments Raymond on an earlier blog post}

A former employee of Intel, Cavite previously told me that when they asked the big bosses about their road map, none was given. The existing plans were only up to 2010. That prompted the employee to jump off and resign as he says it signals an unknown future for the company.

What’s more surprising is that the announced closure will happen as early as 6 to 9 months. Will post additional info later — trying to get a hold of that internal memo.

Intel may be really moving most of its Asian operations to China. That’s where cheap labor is abundant. Intel still has assembly test sites in Kulim & Penang, Malaysia, Pudong & Chengdu, China and Ho Chi Minh City, Vietnam.

Update: This has been confirmed by people from inside. The internal memo was circulated yesterday. There’s still no formal Corporate Announcement though. I’m still trying to get a copy of that memo.

Update 2: The plant will shut down in 6 to 9 month. The back-up plan is to find another location in the country, possibly Laguna TechnoPark or just totally shut down. Plans are not clear yet. Even 12 months lead time is not enough to shut down an Intel plant that big. Most employees are still in the dark.

Update 3: This is the copy of the internal memo we got from inside:

Intel gives update to employees in Cavite
Posted April 2, 2008

Intel leaders in the Philippines told employees Wednesday that significant investments would be required to continue operating the CV1 building, which houses our Assembly and Test operations in Cavite.

In meetings with employees, Intel leaders said they are exploring multiple options for Intel’s long-term presence in the Philippines, which could include the possibility of a smaller operation. Efforts to improve the overall efficiency of Intel’s Assembly Test network have allowed the company to reduce our total amount of floor space required.

Intel leaders in the Philippines say that our plans in that country will be announced to employees by the end of Q2.

Okay, that’s vague.