Approximately 500 jobs will be affected by the transition of Intel's D2 fab from handheld devices to process development for its ST joint venture Numonyx, then finally to mask making.

Intel Corp will close its last Silicon Valley-based chip plant later this year as the result of a deal made in June 2006 when it sold its XScale handheld devices chip business for $600 million to Santa Clara, Calif.-based Marvell Technology Group Ltd. 

Intel spokesman Chuck Mulloy reminded that as part of the deal, Intel would continue manufacturing products currently sold by this business until Marvell arranged other manufacturing resources. As such, at the end of Q1, Intel will stop manufacturing for Marvell.

Although the fab “D2” will not be manufacturing handheld devices any longer, it will be transitioned into process development work in Q3 for the next manufacturing node in conjunction with Intel’s joint flash venture with ST, Numonyx. That deal for is set to close this quarter, following a delay due to financing.  

Commercially available parts will hit the market from these efforts, which will then be transferred to Numonyx.

Following the work for Numonyx, Intel’s mask operations will be moved into D2, Mulloy said.

Approximately 500 jobs will be affected by the transition, with employees either being reassigned within the process development work, leaving the company or looking for positions in other Intel facilities.

D2 was built in 1988, is located on Intel’s property at its Santa Clara headquarters, and contains more than 100,000-square feet of clean-room space.

Intel has fabs in Oregon, New Mexico, Massachusetts, Israel, Ireland, and Arizona. Intel is also building a fab in China.