Almost one year ago, Yuga raised the alarm that Intel might move their Cavite operations to Dalian, China. Well, it didn’t happen at that time. Also, when Intel announced last year that they will sell off their flash memory unit to form a new company called Numonyx, the closing fears circulated the rumor mill again since half of the operations at Intel Cavite was in the manufacturing of flash memory. Well, just yesterday, an internal announcement came that Intel Cavite might close off for good within the next six to nine months.

I got ahold of the leaked (?) info about Intel Philippines closing from the comments left by current and former Intel employees on my “Intel Philippines, Cavite Plant” article over at Vista Pinas. Here are some choice comments:

“Corporate made an announcement today about the closure, including how the separation of employees will be managed.” —JV, April 2

“many employees cried… too bad they had to close it down. the high costs of maintaining the site (i.e., high electricity bills, very high government taxes, building rentals, etc.) drove the closure.” —tuluk, April 3

“Yes, the plant will be closing down 6–9 months from now from what I have heard from those who decided to stay behind. […] The high taxes is not just the unbearable part but the other employees who abused the management and company, stealing microprocessors and selling them to the black market. Oh and yeah, electricity is not only causing them lot (being expensive and all) but causing them lost production time due to fluctuations.” —nie, April 3

Searching around the blogosphere, an Intel employee recounts in his LiveJournal blog that the “official” statement for the planned closure is:

“[Intel Philippines needs to] find another building so that structural abnormalities in CV1 [Cavite Plant 1] can be remedied else Intel will cease all future Manufacturing operations in the Philippines…”

If this is true, and I think it is (Numonyx officially became a company last March 31, 2008 making the timing extremely uncanny), it is a sad day for the Philippines as an investment site. Intel started its operations in the Philippines in 1974, a mere six years after Intel itself was founded, and after 34 years Intel will likely cease operations here having moved to places like Vietnam and China, which are apparently more manufacturing-friendly.

The Philippines needs to get its act together. Otherwise, the only thing we’ll ever be good at here for investment is call centers and business process outsourcing, which is not enough to keep jobs in the country.