Intel to shutter, tear down microchip manufacturing plant in Hudson

Intel has owned the 21-year-old plant in Hudson since 1997.
Intel has owned the 21-year-old plant in Hudson since 1997.

Intel Corp. has given up on trying to sell its microchip manufacturing plant in Hudson and has begun the complex process of shutting it down, and then tearing it down.

The 600,000-square-foot plant, built 21 years ago by now-defunct Maynard computer maker Digital Equipment Corp., was purchased by Intel in 1997. But the chip plant, known in the computer industry as a “fab,” was out of step with the advanced technologies found in other Intel plants. So it was used to make relatively low-end silicon products instead of Intel’s most advanced chips.

In addition, there wasn’t enough open land nearby to expand and upgrade the plant. So in 2013, Intel said it would shut down production at the Hudson fab, eliminating about 700 jobs. The closure did not affect a neighboring 900,000-square-foot research and development lab that employs about 800 people.

Though about 100 of the fab’s employees were soon laid off, most stayed on to fill existing chip orders. Meantime, Intel started looking for a buyer. It was hoped that the plant wouldn’t miss a day of production. But in May, all orders were filled and a buyer hadn’t stepped up, so the final shutdown began.

Intel spokeswoman Ann Hurd said there was some interest in buying the plant, but in the end the would-be owners all backed off. One concern was the size of the plant. “It became apparent that the fab was too large for smaller companies,” said Hurd, “and yet it’s too small for a major semiconductor manufacturing company.”

Nathan Brookwood, microchip analyst at Insight 64,a research firm in Saratoga, Calif., said the Hudson plant made chips from silicon disks 8 inches in diameter. But most plants now use 12-inch disks, which produce more chips from each disk. Upgrading to bigger disks would cost millions of dollars.

“It’s not at all surprising that Intel wouldn’t be able to find a buyer for it,” Brookwood said.

Some companies that didn’t make microchips considered purchasing the plant. But Hurd said those prospective buyers wanted to move in quickly, and there’s nothing quick about decommissioning a microchip factory.

First, there’s the old manufacturing gear. Though obsolete, many plants in the world still use similar systems, so the Hudson machines can be resold. But chipmaking machines are complex and sensitive, and must be disassembled with extreme care. Also, the machines run in an ultra-sanitary environment, far cleaner than a hospital operating room, so they must be sanitized before shipping.

In addition, chipmaking involves dozens of often-toxic chemicals: arsenic, ammonia, and sulfuric acid among them. Intel must remove every trace of these chemicals before demolishing the fab.

Hurd said the entire process should be finished by early 2016, clearing the way for the wrecking crew. She said the land will be planted with grass and restored to a “buildable state.”

Hurd said Intel presently has no plans to develop or sell the land. But David Begelfer, chief executive of NAIOP, the Commercial Real Estate Development Association in Needham, said developers might well be interested in purchasing the property.

Begelfer said soaring real estate prices in Boston and surrounding communities are driving increased development and higher land prices in the Interstate 495 region. “If you’d asked me about it four to five years ago, I’d probably say it’s going to be a challenge,” Begelfer said.

But in the current climate, “there are opportunities out there, depending on the location,” he said. “Prices of property and rent have gone up substantially, so we’re starting to see interest in going out further.”

Hiawatha Bray is a technology reporter for the Boston Globe. E-mail him at [email protected].
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