Intel Corp is spending $800m over the next two years on improvements to the production facilities at its Hudson, Massachusetts chip fabrication plant. The Santa Clara, California-based firm, will build StrongARM embedded processors and networking chips at the plant.

As the market for embedded and mobile processors has become larger with the explosion in the use of mobile phones and handhelds, Intel has started to make greater use of the StrongARM technology it licensed from ARM Holdings Plc. Work on the fab will start in January and continue until 2002.

Intel acquired the Hudson fab as part of the settlement of a 1998 patent dispute with DEC. Under the terms of the agreement, Intel continues to make Alpha chips at the plant for DEC’s owners Compaq Computer Corp.