Intel, the world's largest chip maker, will suspend production in two factories in the US for nine days from today because of overstocks.

The suspension affects 1,700 employees at Oregon plants and is designed to allow for "inventory adjustment," said Mr Chuck Mulloy, a spokesman for the California-based Intel. It is expected to release its quarterly earnings report on July 14th.

It employs 3,600 people at its European headquarters in Leixlip, Co Kildare.

The technology group's sales have been down because of Asia's financial woes while personal computers have become progressively cheaper, making profit margins for Intel chips similarly tight.

Work at the two plants will not stop entirely and could restart again quickly, said Mr Mulloy, who characterised the decision as "fairly routinely done in the industry".