HP cutting Deer Creek staff, work

Electronic News,  Jan 23, 1995  by Walter Andrews

Tags: Hewlett-Packard Co., integrated circuit

• E-mail
• Print
• Link

PALO ALTO, CALIF.-- Hewlett-Packard last week confirmed it was reducing staff and activities at its Integrated Circuit Business-Division (ICBD), but said the cutback would have no impact on development of its Precision Architecture RISC (PA-RISC) processor or its accord with Intel to develop new microprocessors.

An HP spokeswoman confirmed industry reports that close to 250 slots were being eliminated at HP's ICBD at the company's Palo Alto facility located on Deer Creek Road, adding that ICBD's R&D would be discontinued at Deer Creek by the end of 1995. ICBD, which is part of HP's measurement system group, also makes advanced MPUs for HP's computer systems group and some ASICs for external customers.

Sources inside and outside of HP said production equipment at the Deer Creek facility, including steppers, was being sold off. The spokeswoman said the equipment was "IC manufacturing and test equipment. Most of it we're keeping at HP. We have an asset team working on that to find the best use for the equipment, whether that's to sell it or use it in other places in HP." She said HP was working with four brokers: Integrated Solutions, Comdisco, Bid & Brokerage and EASE.

"We have made customers aware of the availability of the equipment... This is HP's transaction. They are selling the equipment," said a spokeswoman for the Comdisco Electronics Group in San Jose, Calif.

One HP source said the closure of ICBD's R&D at Palo Alto was an accomplished fact. "It's not being closed down. It has been closed down. It's like a morgue now." He described the remaining design center as 'a little core that's been left over... There's still a fab but it's being run on a makeshift basis." About half of the Deer Park's fab equipment has been placed on the market, the source said.

The HP spokeswoman declined to say how many employees were employed in ICBD before and after the consolidation but said the reduction was a "single-digit percentage cut" of the overall number. In addition to these two facilities, ICBD has facilities at Santa Clara, Calif. and Singapore. It also will maintain a small design technology center at Palo Alto, the spokeswoman said.

"The consolidation is really part of ICBD's ongoing business planning process... We were considering this decision long before our alliance with Intel. As a result of the consolidation, ICBD will need fewer employees. We're continuing to develop and manufacture current and future generations of PA-RISC microprocessors. These activities aren't going to be affected by the decisions to end ICBD's activities at Deer Creek. ICBD will continue manufacturing ASICs and providing high-performance processors to the computer systems organization. A small portion of our ASIC business is external but the high-performance PA-RISC microprocessors we provide to our own computer systems. We have several generations of PA-RISC processors under development right now, including a 64-bit PA-8000 processor which we expect to be in systems in early 1996."

The spokeswoman said the move would have no impact on HP's continued development of its PA-RISC used in its workstations, or its $500 million agreement with Intel to develop a new 64-bit microprocessor (EN, June 13). The HP spokeswoman described the move as a "consolidation" of the Palo Alto functions at the ICBD's facilities in Fort Collins, Colo. and Corvallis, Ore. unrelated to the PA-RISC development or the accord with Intel.

Asked if some of the affected people might be moving to Intel development work, the spokeswoman said attempts will be made to find them jobs within HP, or "severance incentives" would be offered per usual company policy. On how many of the 250 people were working on the PA-RISC or on the joint HP-Intel work, the spokeswoman replied: "That's not a question I can answer ... We're not going to disclose that information."

Dan Hutcheson, president of VLSI Research Inc. in San Jose, Calif., last week saw the move as making HP overly dependent for microprocessor development on Intel, which he said has a poor record in holding up its end in joint development efforts. "This is going to make Hewlett-Packard extremely dependent on that (Intel-HP) development effort. And, it's kind of surprising that HP would do it considering the track record companies have in working with Intel on joint development programs."

One industry source said the elimination of the 250 slots and the selling of the equipment was, indeed, related to the Intel-HP agreement, with Intel's P7 MPU project now being disbanded and serving as the code-name for the joint; HP-Intel effort to develop a "dual-architecture" MPU incorporating aspects of both Intel's x86 and HP's PA-RISC architectures.

When asked if HP's decision to downsize the ICBD R&D program would affect the Intel/HP development effort, an Intel spokesman said, "I haven't heard about it." When asked if Intel's P7 development effort is still on track, the spokesman declined to comment.

COPYRIGHT 1995 Reed Business Information, Inc. (US)
COPYRIGHT 2008 Gale, Cengage Learning