|
Intel tightens belt further on CapEx and R&D spending; 45nm comes earlier |
|
|
|
Oct 18, 2006 at 12:18 PM |
 Intel Corporation has announced further capital expenditure (CapEx) cuts for 2006 as it focuses on improving operational efficiencies after a major review of the whole Company.
"We exceeded our goals in reducing spending during the quarter as we
lowered headcount and cut discretionary spending," remarked Andy
Bryant, CFO of Intel Corporation, during a conference call with
financial analysts. "Spending is also down sequentially as a percentage
of revenue. R&D and MG&A were $2.8 billion lower than the
forecast in July and down 9 percent from the second quarter. Excluding
share-based compensation of $232 million, spending decreased
approximately 8 percent from a year ago."
Intel is now expected to spend between $5.7 billion and $5.9 billion on CapEx in 2006 compared to the original forecast set in January, 2006 of approximately $6.9 billion - a $1 billion reduction. CapEx for the past quarter was $1.2 billion, according to Intel.
The company reiterated that CapEx savings had not come at the expense of ramping 65nm new products such as the Core 2 Duo microprocessors that indeed were being ramped aggressively. Better productivity from existing 65nm ramping fabs was given for the further CapEx reductions.
Paul Otellini, Intel's CEO, stated that "our factories have been executing extremely well with over 40 million 65nm processors now shipped and a crossover from 90nm now achieved. Our 45 nanometer process development is on track for the second half of 2007 and we plan to tape out the first of 15- 45nm processors this quarter." Otellini had previously stated that 45nm designs would be finished in November 2006.
The 45nm node products include the announced quad-core processors, which are currently in test production mode at Intel's D1D fab in Oregon. Intel expects 65nm quad-core processors to start shipping in November 2006.
Intel is expected to have two 300mm fabs ramping volume production 45nm processes by mid-2007 (Fab D1D & Fab 32) while the slightly delayed Fab 28 in Israel will start production sometime in the first half of 2008. D1D was originally used for 65nm development work but will be the first fab to fully ramp to volume production with Intel's 45nm processes. The combined CapEx for these three 45nm fabs is $9 billion, according to Intel.
"We plan to sustain our lead by being the first to 45-nanometer and delivering a new core or shrink every year," stated Otellini. "We will achieve these goals by becoming more agile and putting the right cost structure in place for our future growth."
|
News 
