Intel selling Colorado Springs operation

COLORADO SPRINGS – Intel Corp. (Nasdaq: INTC) is leaving Colorado Springs and is trying to find a buyer for not only the building, but also the 1,000 employees who work there.

In its report on fourth-quarter and year-end earnings, Santa Clara, Calif.-based Intel announced its plans to sell its fabrication facility in Colorado Springs, which it opened in 2001.

The site was largely responsible for the production of chips in the communications and applications processor business, which was sold to Marvell Technology Group Ltd. in November for about $600 million.

Intel will look for a buyer to purchase the Colorado Springs facility and to take on its employees. There is no timeline set for this to occur but, if a buyer is not found for both, Intel will have to lay off the employees and sell the building alone.

“The decision to sell the Colorado Springs facility will have no impact on the Fort Collins Design Center,´ said Judith Cara, spokeswoman for Intel Colorado. Intel opened a design center in Fort Collins after acquiring the Itanium processor group from Hewlett-Packard Co. in 2005. The center now employs around 300.

She explained that the design center in Colorado Springs was part of the Marvell deal and that there are no longer any engineers at the facility who could have been transferred to Fort Collins.

For the fiscal year 2006, Intel reported revenues of $35.4 billion, down from $38.8 billion in 2005, while net income decreased 42 percent from 2005 to $5 billion.

In September, the company announced it would decrease its work force to 95,000 by the end of the year. Intel ended 2006 with 94,100 workers, down from 102,500 in the second quarter. The restructuring is expected to result in a cost savings of $2 billion this year, without taking into account the restructuring costs.

The company is in the process of valuing land, buildings and equipment at the Colorado Springs facility. The 2006 year-end filing reported that Intel expects to take a write-down of $214 million on the assets, and take charges of about $50 million in employee severance and benefit arrangements during the first quarter of 2007.

“For these employees, plans regarding employee termination benefits will depend in part on the terms of any sales transaction regarding the facility,” the filing read.

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