SANTA CLARA, Calif.--Intel Corp. here today disclosed some good and bad news on the chip-manufacturing front: the company will slash its capital spending, but it appears to be accelerating its 90-nm process efforts, by qualifying the technology by mid-2003.
The company made the disclosures during a conference call to discuss its results for the fourth quarter of 2002. Intel reported better-than-expected results, but it is also slashing its capital spending plans for 2003 (see today's story ).
Capital spending for 2003 is expected to be between $3.5-to-$3.9 billion, as compared to $4.7 billion in 2002. Intel's semiconductor equipment spending is being primarily targeted at 300-mm wafer production, which is providing the company with greater capital efficiency and lower manufacturing costs, according to the Santa Clara-based company.
The lackluster figure is bad news for fab-tool vendors, which have already been hit hard by a two-year downturn in the IC business. Intel itself is the world's largest buyer of capital equipment and can make or break fab-tool and material suppliers.
On the positive front, Intel is moving full speed ahead with its push towards 90-nm process technologies and 300-mm wafer substrates. In the past, Intel has publicly stated that its 90-nm process would be up and running sometime in the second half of 2003.
But now, the company has provided more guidance on its roadmap. "Our plan is to qualify our 90-nm process in mid-2003," said Paul Otellini, president and chief operating officer of Intel. "We have also completed the designs of Prescott and Dothan," he said during a conference call with analysts here today.
The Intel executive was referring to its next-generation processors at the 90-nm process node, code-named Prescott and Dothan. Prescott is a processor for desktop PCs, while Dothan is geared for notebook computers. Prescott is due out in the second half of 2003, but it's unclear when Dothan will hit the streets.
Intel executives were also quick to point out that the company's fabs will be ready to meet demand for these chips. It plans to build these 90-nm chips on 300-mm wafer substrates.
Andy Bryant, Intel's executive vice president and CFO, said 90% of the company's 2003 capital spending is aimed for its 90-nm process technology, compared to 50% in 2002. Some 90% of Intel's 2003 capital spending is geared for its 300-mm fabs, he added.
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