Intel will pump $345m into two US fabs in a bid to boost production capacity, the chip giant said yesterday.

The two fabs targeted for investment, Fab 17 in Hudson, Massachusetts and Fab 23 in Colorado Springs, Colorado, both work with 200mm wafers.

As such, they're used primarily to punch out chipsets, communications parts and Flash memory components. While Fab 17 will get $155m to increase overall production capacity, Fab 23's cut, $190m, will be used to kit out a second clean room which will be used to finish off processors made on 300mm wafers at other Intel facilities.

Both projects will create around 500 new jobs in total: 300 at Hudson and "several hundred" at Colorado Springs.

"These investments will increase the capacity of our 200mm manufacturing network to support our platform initiatives and will give us additional supply flexibility across a range of products," said Bob Baker, senior vice president, general manager, Technology and Manufacturing Group.

Earlier this month, Intel admitted it had "sold out" of notebook chipsets. In August, it said it was shifting output away from entry-level desktop chipsets in order to focus available capacity on higher-end, higher-margin chipsets, causing some observers to claim Intel plans to quit the low-end chipset business - a move the manufacturer later denied. ®