Intel Taiwan announced the fab in Sichuan Province of China has been closed indefinitely due to the 7.9-magnitude earthquake that hit the country yesterday. The chip giant says water and power supply is interrupted but claims not all production equipment has been damaged.
The factory is Intel's second in the Chinese mainland, specifically testing and packaging chipsets and microprocessors for uses in Asia. If Intel fails to find backup production capacity for the suspending factory, chipset and processor supplies in Asia would decrease in the third quarter.
Intel was assessing yesterday the feasibility of delegating the work at the Chengdu factory to its factories in Shangai, Malaysia and the Philippines as well as dedicated assemblers including ASE, Amkor and Siliconware Precision Industries.
Taiwanese industry watchers estimated Intel might contract ASE and Siliconware to test and assemble south-bridge chips for the chipsets and some logic chips waiting at the Chengdu factory. ASE is running a factory outfitted with 1,500 wire-bonding machines in the mainland. The factory will double output capacity by the end of this year.
Some assembly insiders pointed out even if the Chengdu factory was hit by the earthquake, the production resumption would not be complicated since the factory deal with dies not wafers.