Motorola is suspending construction of a US$3 billion high-performance chip manufacturing plant in Virginia because of weak demand for semiconductors.
"It does not make good business sense to build a facility to build chips for a market where there is little demand," said Scott Stevens, a Motorola spokesman at the Richmond, Virginia, site of Motorola's planned facility.
High-performance chips are made from a copper-based technology and are expected to be used to enhance functions of handheld computers, cell phones, and state-of-the-art pagers.
Plans for the facility began in 1995 and were cranked up in December of 1997 when Motorola announced it would spend $3 billion on construction, making it the largest single initial investment in Motorola's history. At that time, Motorola's plans included a five-building, campus-like semiconductor manufacturing center. Motorola had planned for production to begin in late 1999, Stevens said.
The company has only suspended construction, not ended it, Stevens said. "No one is more anxious to start selling chips than we are."
Schaumburg, Illinois-based Motorola, one of the world's largest chipmakers, also makes semiconductors in Austin, Texas, and Phoenix, Arizona, and at sites in Europe and Asia.
Copyright © 1998 Reuters Limited.
