Intel abandons chip factory plans -

Fashion bag maker Chipzilla has delayed its planned opening a major chip factory touted by President Barack Obama as an example of US manufacturing potential.

"Fab 42" facility built in Chandler, Arizona, was supposed to cost $5 billion and start making Intel's most advanced chips.

According to Intel spokespinner Chuck Mulloy it will remain closed for the foreseeable future while other factories at the same site are upgraded.

"The new construction is going to be left vacant for now and it will be targeted at future technologies," Mulloy - who used to work for AMD -  told the local press.

Despite not opening the new factory, or fab, Intel has exceeded a target to hire over 1,000 employees since construction started in 2011, Mulloy said. Intel received state tax benefits for hiring those people. Quite what they are doing is anyone's guess.

The news will be embarrassing to Obama, who made a stop at the factory's construction site, where he called for government incentives to attract manufacturing lost to Asia in recent years back to the United States.

Intel has had a tough few years. Last year global PC shipments fell 10 percent, the worst year since market research firm Gartner began tracking the tin boxes.

Apparently, the newer fab has not been equipped with the capital equipment. It has heating and air conditioning but the actual tools and the expensive stuff, is not there.

Intel originally meant to install its most advanced manufacturing technology at the plant and make 14 nanometer chips.

Existing factories at the Chandler site using Intel's previous generation of manufacturing, 22 nm, are being converted to make chips at 14 nm and many of Intel's new employees are working there, Mulloy claimed.