Dan Warne22 January 2009, 2:33 PM
Here's a true measure of the economic crisis: Intel, which has a near monopoly on production of CPUs, struggled to make any money at all in its last quarter.
Chip giant Intel today announced it would close five factories that had been manufacturing older technology chips, with job cuts affecting up to 6,000 employees.
The decision follows a drastic plunge in Intel's fourth quarter profits, which were down a staggering 90% on the same period a year before.
Not only did Intel's profit margin on the chips it manufactured, but the total amount of sales dollars it took were down 23% year-on-year as well.
This is despite Intel having cornered the market for netbook CPUs with its low-poweredAtom processor, showing that the low price of netbooks may be popular with consumers but isn't helping the computer industry make money.
Despite the lower-priced Atom processors, the price of Intel chips on average was actually higher in the last quarter than the same time last year, which, by inference, suggests fewer computers are being sold than the same time last year.
Intel said the lower profit margins were partly due to a $1billion investment in a WiMax network provider Clearwire.
Intel chief Paul Otellini said -- in a statement of rather stunning obviousness -- "The economy and the industry are in the process of resetting to a new baseline from which growth will resume."
The five factories Intel says it will close include two existing assembly test facilities in Penang, Malaysia and one in Cavite, Philippines, and Fab 20, an older 200mm wafer fabrication facility in Hillsboro, Oregon. Wafer production operations will also be stopped at the D2 facility in Santa Clara, California.
"Not all [6000] employees will leave Intel," the company said in a statement. "Some may be offered positions at other facilities. The actions will take place between now and the end of 2009."