Intel to Use $5 Billion in Capital Spending To Buy and Build

By Lisa Nadile

Intel's $24.4 billion in revenues for 1999 gives the company room to buy new equipment for its cleanrooms and new economic opportunities for building additional fabs, says a company spokesman.

“We'll use these funds both to buy equipment and materials for our manufacturing process technology for existing facilities as well as for purchasing new buildings [to add to our 0.18-micron capacity],” says Doug Lusk, assistant treasurer for investors at the Santa Clara, CA-based Intel. Lusk declined to provide any more details. “The funds will not be used in R&D, but they will be used in product development and such purchases as additional buildings,” he adds.

The 12 percent gain in revenue over 1998's figures gives the semiconductor giant a cool $5 billion to put towards capital spending this year. The $1.6 billion gain over last year’s capital spending figures gives the company a secure launch pad for its move into next generation 0.13-micron process technology for 300mm and 200mm.

Intel's fourth quarter revenue is the highest ever: $8.2 billion, which is up 8 percent from fourth quarter 1998 and up 12 percent sequentially.

“The record growth was due to our record unit shipments of microprocessors, chipsets, motherboards, and flash memory,” says Lusk. The revenues are due to high sales of PCs and indirectly to consumer interest in the Internet, he says. However, Lusk emphasized that the Internet was only a contributor to Intel's success.

Intel's 1999 success is reflected in recent sales figure estimates from Dataquest and the Semiconductor Industry Association of an 18 percent gain. Analysts at these companies say an ramp up in capacity is expected for the long term, which bodes well for cleanroom suppliers.

For more information, visit Intel at


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