The top news headlines on the past few days is obviously the plan to close 2 Intel plants, PG6 and PG7 in Penang. Although there are no layoff as reported, but it is come as a surprise to many especially on the eve of Chinese New Years.

The move comes few days after Intel reported its 4Q earning, with net come drop significantly to only $234 millions,  down 88 percent against Q3 and down 90 percent against Q4 2007.

In addition to these 2 plants in Penang, one plant in Cavite, Philippines will be closed as well. Intel will also halt production at Fab 20, fabrication facility in Hillsboro, Ore for older 200mm wafer fabrication and wafer production operations at the D2 facility in Santa Clara, Calif.

With this planned closure, Intel who is very synonym with Penang Free Trade Zone (FTZ), has switched to Kulim’s plants as the major manufacturing hub on this region. Kulim which is located 38.7 km away from Bayan Lepas, Penang has seen further investment from Intel on recent years.

It is blow to Penang state goverment which has been working hard to retain current investment and at the same time attract more FDI investment to this small island. Looks like Intel employees are the first major casualty of global economy crisis in Malaysia.