The global financial crisis has hit Intel, as the company announced it will shift some assembly and test facilities from Shanghai to Chengdu, a move that will affect about 2,000 Intel employees in Shanghai.
The public relations department of Intel told local media that because both of Intel's Shanghai and Chengdu plants are assembly and test plants, the company will move the one in Pudong, Shanghai, to Chengdu, the capital of Sichuan, over the next 12 months.
After the adjustment, the production capacity of the Chengdu plant will be increased and the Shanghai plant will be closed. Intel emphasizes that it is different from a total factory shutdown, because the company's total production capacity in China will not be changed. This way of looking at the situation is perhaps good news for investors, but bad news for employees in Shanghai.
This adjustment will affect Intel's 2,000 employees in Shanghai, but, again emphasizing that it is not a layoff, Intel will offer opportunities for those affected employees to either transfer to the Chengdu plant, a plant which is under construction in Dalian, or Intel's other departments in China. For how to deal with those who do not want to transfer to other positions, Intel says it has not worked out a detailed plan.
Shanghai is still Intel's most important research base and the location of its Chinese headquarters. The company will also add USD110 million registered capital to its investment subsidiary in Shanghai to enhance its investment and management in China.