FEB. 19–SANTA CLARA, Calif.–Intel Corp. will shell out $2 billion for a 300-mm conversion for its manufacturing plant in Chandler, Ariz.

Once it opens in 2005, it will be the company’s fifth facility to produce chips on the larger wafers, Craig Barrett, Intel’s chief executive officer, said in a recent meeting with reporters before his keynote address at the Intel Developer Forum in San Jose.

The project is planned for next year, and the firm’s capital spending budget between $3.6 billion and $3.9 billion this year — will not change, Barrett said.

Intel, he added, can save more money with 300-mm chip plants because five of them can manufacture as much as 10 factories using 200-mm wafers.

Despite the tough times in the industry, Intel needs to push ahead with its technology, said Barrett.

“There is pent-up demand (for technology) out there,” he said. “What’s going to ignite that pent-up demand is innovation.”

He noted that while information technology spending is still muted, some companies are beginning to loosen their purse strings to replace old PCs.

Intel plans to buy 35,000 new computers this year, Barrett said, noting that it is costly to businesses to maintain old PCs and lose revenue as workers on slower machines become less productive.

“We’re still in a recession, but most of the current estimate is that we’ll see growth in IT spending of 5 percent to 10 percent (this year),” he said.