HUDSON, MA-If anyone out there needs further proof that the high-tech downturn is real they need look no further than this town where a little over a year ago Intel, the giant chip maker, announced it was investing nearly $1 billion into its plant here. This week, the company announced that it was putting the expansion plans on hold.

Intel's plans were to convert two buildings here into clean room space, which is required to manufacture chips. When Intel acquired this site from Digital Equipment in 1998 it was the company's first foray into the state. The first building, called Fab 17, which is short for Fabrication Plant, consists of three areas that will ultimately yield 100,000 sf of space.

Patrick Ward, the company spokesperson, tells GlobeSt.com that Intel plans on completing the conversion of those three areas where the company plans to manufacture Pentiums and Celerons by the third quarter of this year. Intel was planning to build an additional 50,000 sf of clean room space but has decided to hold off on that addition.

“We've held up construction of the Mod 4 addition,” says Ward. “We've done site preparation and once we've finished with those contracts we will stop. When and if conditions improve we may start construction again.”

A week ago Intel announced that it would not meet its earnings expectations, which Ward blames on the global downturn in demand for high-tech products. Ward emphasizes that the company's capital expenditure budget of $7.51 billion for 2001 has not changed. “We're continuing with that figure,” he points out. “We're just doing some adjustments.”

Ward also insists that the only reason that construction was halted on the site here is that this project was not as far along as other projects. “Intel is committed to the Hudson site,” he says. “Fab 17 is on track to becoming a major site for the company.”

According to Ward, $800 million has been invested in the plant here, adding that the company's recent announcement that it was cutting 5,000 jobs would have no impact on the plant here. “Those layoffs will be mostly through attrition,” he says. “If some people leave their jobs here they may not be filled.” A thousand people have been hired over the last year for this site.

For related news, click on:Intel Construction Retreat Sparks Site Buyout Bids