Hit by slumping personal computer sales, hardware giant Intel has put off opening a major chip factory.
The "Fab 42" facility built in Chandler, Arizona, will remain closed for the foreseeable future while other facilities at the same site will be upgraded. Intel's decision not to open the chip plant was first reported on Tuesday.
Larger chips, lower costs
Intel is the world's top chip maker but it has been caught off guard by the success of smartphone and tablets, a revolution in computing that has eaten into the usual demand for PCs. Global PC shipment took a dive in 2013, the worst year for the platform since Gartner began tracking it.
It is currently expanding a plant in Oregon where engineers will work on a long-term plan to manufacture microchips on silicon wafers measuring 450mm. The largest currently used in the chip industry measure 300mm across.
Plans by Intel and big rivals like Samsung Electronics to eventually expand to 450mm will allow them to save manufacturing costs by squeezing more chips on each production line. Intel, which on Thursday is due to report is fourth-quarter earnings, said in November it expects its revenue to be flat in 2014 compared to last year.