Intel closes Costa Rica operation, cuts 1,500 jobs

By Noel Randewich

SAN FRANCISCO (Reuters) - Chipmaker Intel, struggling with a shrinking personal computer market, is shutting its assembly and test operation in Costa Rica and eliminating 1,500 jobs, a spokesman said on Tuesday.

The plan to close the site, which is a significant contributor to Costa Rica's exports, follows other steps announced by the chipmaker this year to cut spending as it attempts to grow beyond PCs into the mobile market.

"It's being closed and consolidated into our other operations throughout the world," spokesman Chuck Mulloy said of the assembly/test operations in Costa Rica.

During the next two quarters, Intel will move assembly and testing from Costa Rica to its other sites, Mulloy said. Intel has assembly and test sites in China, Malaysia and Vietnam.

Still, Intel will continue to employ around 1,000 engineers and other people in Costa Rica, Mulloy said.

Intel dominates the PC chip industry, but it has been slow to adapt its processors for smartphones and tablets, markets now dominated by rivals like Qualcomm Inc (NasdaqGS:QCOM - News) and Samsung Electronics Co Ltd (:005930.KS).

In January, the Santa Clara, California company said it would reduce its global workforce of 107,000 employees by about 5 percent this year.

Also in January, Intel said a newly built factory in Chandler, Arizona, originally slated as a $5 billion project that in late 2013 would start producing Intel's most advanced chips, would remain closed for the foreseeable future while other factories at the same site are upgraded.

(Reporting by Noel Randewich; Editing by Leslie Adler and Diane Craft)