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Plans for Intel's Texas plant halted

Tax issues are putting construction of an Intel chip factory in Fort Worth, Texas, on hold, Intel says.

Tax issues have put construction of an Intel chip factory in Fort Worth, Texas, on hold, Intel said today.

Intel started construction of the Fort Worth plant in 1997, but initially put the project on hold in 1998 because of the slump in the semiconductor business, spokesman Chuck Mulloy said today. Now, because of a penalty Intel would have imposed on the local school district, the Fort Worth plant is no longer in Intel's immediate plans.

Intel got a break that would have allowed it not to have to pay as much in tax for the local school district, Mulloy said, but because of Texas state law, that tax abatement would have meant the same school district would have had its state funding cut. Intel worked with legislators to have the law changed, but the effort faltered.

"We didn't want the school district to have to lose that much in revenues" because of the arrival of Intel, Mulloy said.

For building a new, larger 300mm size of wafers--the crystalline disks from which chips are cut--Intel turned its attention to a new plant to be opened in Chandler, Ariz., in 15 to 16 months. Intel will begin construction on that plant in two or three weeks, pending approval from local city council approval, Mulloy said.

The Fort Worth Star-Telegram reported today that Intel had spent $70 million so far on the Fort Worth plant, which would have had as many as 5,000 employees in the five years.

"We haven't eliminated (Fort Worth) from the long-term view, but it's not in any of our near-term plans," Mulloy said. "As we ramp up our 300mm program, (Intel will be) looking for additional capacity."