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INTEL PLANS MANUFACTURING BASE IN INDIA

BOMBAY - Computer chip maker Intel is keeping its options open on beginning production in India, according to company President Paul Otellini. "We are open to set up a manufacturing base in India, although there are no immediate plans," Otellini told reporters recently on the sidelines of a meeting with business leaders in Bombay. He said India is already the Santa Clara-headquartered company's largest non-manufacturing base outside the US, with a workforce that has grown from 100 to 1,000 in three years. It plans to raise this to 3,000. Intel, which designs computer chips in India for the switches and routers used in directing Internet traffic, also plans to start design work for its Pentium and Xeon processors in the country. Otellini said India's IT industry would get a boost if the country quickly adopts to the wireless technology. He said India has among the lowest level of hotspots -- or locations that allow wireless units to work -- in Asia and fewer than percent of the number found in China. "Wireless technology is to network computing what cellular phones are to the telecommunications industry," Otellini said, adding that the global semi-conductor business is expected to grow 5% to 10% in 2003. "Most manufacturers are forecasting personal computer business to grow by six to 10 percent and we do not argue that," he said.

FACTORY ORDER NUMBERS DOWN, SAYS COMMERCE

WASHINGTON, DC - The Department of Commerce's recently released factory-order numbers reveal a dark shadow over the manufacturing industry, adding credibility to a spending report from Forrester Research showing the vertical sector further pulling back the reins on IT investments.  Factory orders fell 2.9%, or $9.4 billion, to $319.99 billion in April, after a 2.1% rise in orders recorded for March. That's the largest percentage decline since November 2001. Shipments decreased 2.2%, or $7.1 billion, to $320.6 billion, the largest percentage decline since February 2002. For durable goods designed to last three years or longer, factory orders declined 2.3%, the Commerce Department said, revising a previously reported 2.4% decline.  The statistics loosely mirrored economic indicators released in early June by the Institute for Supply Management. The PMI - previously known as the purchasing managers index - for May was at 49.4%, with 50% or higher indicating economic growth or expansion. This is the third consecutive month that the sector hasn't grown. Yet some sub-indexes, such as the New Orders Index and Production Index, crossed the 50% mark last month after two consecutive months of decline--indicating that things may be just beginning to turn around after declines attributed to the war in Iraq. Indicators say manufacturers are still looking to cut costs, including IT spending. A report from Forrester Research shows that 33% of general manufacturers will spend below their original IT budget for 2003. Manufacturing combined with the technology vertical largely account for the 23% of U.S. firms that have cut their projected spending on technology, based on a survey of 700 firms. That has prompted Forrester to revise its overall IT spending growth rate from 1.9% projected earlier this year to 1.3%. At the beginning of the year, manufacturing companies had planned for above-average budget growth but now are among those more likely to pull back on spending.

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