Intel to invest $7 billion in chip manufacturing
Plus: Dow plunges after bank bailout plan revamp; Genentech pushed for $112 a share from Roche; AMD delays shareholder vote Despite the worldwide recession, Santa Clara computer chip giant Intel said today that it will invest $7 billion over the next two years on state-of-the-art chip manufacturing in the United States, adding that its plans have drawn praise from President Obama.The expenditure will revamp existing Intel plants in Oregon, Arizona and New Mexico so they can manufacture the company’s most advanced 32 nanometer chips, which have circuits shrunk to 32 billionth of a meter or about one millionth of an inch. Currently, 45 nanometer chips are the smallest semiconductors on the market. During a speech today in the nation’s capital attended by several hundred business leaders at the Economic Club of Washington, Intel’s Chief Executive Officer Paul Otellini said the company was making the investment because “you can’t stop innovating,” even when the economy has turned sour. Otellini added that Obama called him Monday night to congratulate the company for planning to spend heavily on developing the new chips Dow plunges 382 points: Investors are frustrated with the government’s latest bank bailout plan — and showing it by unloading stocks. Financial stocks led the market lower today, reflecting Wall Street’s growing concerns about the government’s ability to restore the health of the banking industry. Traders and investors said the lack of specifics from Treasury Secretary Timothy Geithner on how the government would direct more than $1 trillion in public and private support was troubling. The plan is aimed at restoring proper functioning to credit markets, which seized up over worries about bad debt after the September bankruptcy of Lehman Brothers Holdings. The latest plan calls for a government-private sector partnership to help remove banks’ soured assets from their books. Genentech sought $112 a share from Roche: Roche said it started a hostile $86.50-a-share bid for Genentech after talks in which the biotechnology company said it wanted $112 a share, or 29 percent more. Roche disclosed details of its negotiations with Genentech in documents filed Monday with the U.S. Securities and Exchange Commission. Roche’s disclosure of the $112-a-share figure is the first indication of the price Genentech thinks it is worth. The view was dismissed by Roche Chairman Franz Humer, who according to the filing told Genentech the price wasn’t “an appropriate starting point for negotiations.” On Jan. 30, Roche lowered its $89-a-share offer made in July, saying it would take the bid directly to shareholders. Roche, based in Basel, Switzerland, owns about 56 percent of South San Francisco-based Genentech and wants to buy the remainder to gain full ownership of the U.S. company’s cancer medicines. AMD delays shareholder vote: Advanced Micro Devices, the second-largest maker of computer processors, rescheduled a meeting meant to let investors vote on the spin off of its plants as part of an investment from the Abu Dhabi government. There weren’t enough shareholders at the meeting to reach quorum, the Sunnyvale-based company said today in a statement. The meeting will reconvene on Feb. 18 at 10 a.m. local time at the Hilton Austin Airport hotel in Texas. The cash infusion would be a lifeline for AMD, which analysts expect to report its fourth annual loss this year. The chipmaker has failed to keep up with investments by Intel — the dominant maker of personal-computer processors, with 80 percent of the market. Earlier today, Intel said it plans to spend $7 billion over the next two years on U.S. plants alone. Silicon Valley tech stocks: Up: SiRF Technology and Virage Logic Down: Apple, Cisco, Genentech, Google, Hewlett-Packard, Intel and Yahoo The tech heavy Nasdaq composite index: Down 66.83, or 4.20 percent, to 1,524.73. The blue-chip Dow Jones industrial average: Down 381.99, or 4.62 percent, to 7888.88. And the Standard & Poor’s 500 index: Down 42.73, or 4.91 percent, to 827.16.