AT LEAST 1,000 workers laid off by chip manufacturer Intel will be hired by its sister company Numonyx Memory Solutions, an official said yesterday.

Another 600 workers from Intel?s manufacturing plant in General Trias, Cavite, that shut down last month had already been absorbed by Numonyx, which is also based in Cavite, said Lilia de Lima, director general of the Philippine Economic Zone Authority.

?A plant of Numonyx in Pudong, China, will also transfer to the Philippines, and they will be hiring 400 workers more from the Intel plant that closed,? De Lima said.

She said no other company out of the 1,956 firms operating in the economic zones had pulled out despite Intel?s closure. Some had only enforced shorter week hours to keep all their workers as a result of the economic crisis, she said.

Meanwhile, Intel Corp. plans to spend $7 billion to upgrade its US factories over the next two years, a sign that the recession hasn?t extinguished chip makers? lust for cutting-edge equipment.

The company?s investment, announced Tuesday by Intel chief executive Paul Otellini at a speech in Washington, speaks to the semiconductor industry?s need to keep investing heavily, regardless of the poor economic climate that has led Intel to cut jobs.

The investment could be a boon to companies that produce chip-making equipment, like Applied Materials Inc. and KLA-Tencor Corp., and is another example of how Intel?s deep pockets have kept rival Advanced Micro Devices Inc. at bay.

AMD, having lost nearly $7 billion over the past two years, wants to break off its factories into a separate company to unload debt and save money. A shareholder vote was scheduled for Tuesday, but was postponed until next week because only 42 percent of investors had voted.

AMD needed at least half to go forward. AMD said nearly all the votes were in favor of the plan, but Wall Street apparently viewed the news as another setback for the beleaguered chip maker. AMD shares dropped 25 cents, or 10.6 percent, to $2.11.

Intel?s stock fell 83 cents, or 5.6 percent, to $14.08.

Santa Clara, California-based Intel is struggling with the worst PC market in years. Overall semiconductor sales fell in 2008 for the first time in seven years, slipping about 3 percent to $249 billion, according to the Semiconductor Industry Association.

Yet Intel says its latest investment is the most it has ever spent on a transition to new manufacturing technology.

Every couple of years, chip companies make the multibillion-dollar switch to new equipment that enables chips with smaller and smaller circuitry. The change lets them make each chip more powerful, and is essential to maintaining Moore?s Law, the prediction by Intel co-founder Gordon Moore that the number of transistors on a chip will double about every two years.

Moore?s Law has been the industry?s benchmark for technological progress for more than 40 years, but chip makers are finding it harder to maintain because of physical limitations of the materials used in making microprocessors.

Intel says the $7 billion will pay for new machinery at factories in Oregon, Arizona, and New Mexico, which will be outfitted to produce chips based on 32-nanometer technology. The most advanced chips are now made with transistors as small as 45 nanometers wide. Intel says 2,000 of those transistors would fit across the width of a human hair. Joyce Pangco Pa?ares with AP