Intel Corp. plans to lay off 800 workers from a chip-making plant in Colorado by August, after Marvell Semiconductor Inc. began ordering those parts from another supplier, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC).
Intel and Marvell have done business since June 2006, when Marvell bought Intel’s XScale communications chip division and its 1,300 workers for US$600 million. The sale was one component of Intel’s sweeping corporate reorganization that also included the layoff of 10,500 employees.
Marvell now sells those “Monahans” chips to vendors of mobile phones, smartphones and other consumer electronics handsets that use the processors to handle multimedia and mobile Web browsing, telephony and GPS (global positioning system) navigation.
Intel learned of Marvell’s decision to find a new supplier around January, and warned its workers that month that it planned to sell the Colorado Springs plant, said Intel spokesman Chuck Mulloy. He declined to say how much revenue Intel will lose when the contract ends.
Intel plans to offer severance packages to its workers beginning in early August.
Marvell confirmed it was shifting the business to TSMC, saying its agreement with Intel had been created to last only through the transition of acquiring the cellular and handheld group.