INTEL IS putting on hold the upgrade of its newest factory on its Leixlip, Co Kildare campus, according to research notes published yesterday by analysts at Barclays Capital and Citi.

Both CJ Muse at Barclays and Timothy Arcuri at Citi said that Fab 24 in Ireland would not be upgraded to produce Intel’s 1270 chips.

Mr Muse said it was unclear whether Intel would put production at a plant in Israel or simply reduce its capital spending. He said Intel was expected to make a decision on this “by the second week of September”.

Citi analyst Mr Arcuri said Intel “has changed its plan on its Fab 24 in Ireland, putting on hold the upgrade of the fab” but that it would not reduce capital spending by the world’s largest maker of computer chips until 2012.

He said Intel “plans to revisit the future” of Fab 24 when it is considering production of newer generations of microprocessors.

Both analysts attributed the decision to “worsening” or “weak” PC sales.

Fab 24 is the newest factory at Intel’s Leixlip campus, where it employs close to 4,000 staff and has invested $7 billion since establishing Irish operations in 1989.

An Intel spokesman did not return calls last night seeking comment on the research notes.

Earlier this week subcontractors working on the refurbishment of another factory on the campus, Fab 14, said they had been told that project was being put on hold for up to a year.

However, a spokesman for Intel Ireland insisted the project was on track and it was company policy not to comment on the activities of its contracting companies.