SAMSUNG rubbed more salt into the wounds of its North-East workforce yesterday by overtaking Intel as the world's biggest manufacturer of microchips.

The company is already under fire after announcing the closure of its plant at Wynyard, near Billingham, on the day it released record profit figures.

Samsung's 420 workers are to lose their jobs after bosses decided to switch production of microwave ovens and flat panel monitors abroad.

Although the company has invested heavily in production facilities, UK workers can no longer compete with factories in China and Eastern Europe where wages are far lower.

Samsung officials say they plan to keep research and development facilities in Western Europe while switching production to cheaper territories.

Its capital plans show a 43 per cent jump in outlay on semi-conductors to £4.3bn - spending that outstrips even Intel, the world's best-known microchip manufacturer.

The news will come as another blow to Samsung's North-East workforce.

Unions said it was indicative of the global economy.

Davey Hall, Amicus regional secretary, said: "It is a sign of the times that capitalism throughout the world can bestow misery on so many.

"The Wynyard employees have been sadly let down."

Samsung's rush to boost microchip capacity comes after a strong rebound in prices.

The semiconductor industry is notoriously cyclical, with regular peaks and troughs.

Manufacturers have to endure a rollercoaster ride rushing to build plants when demand is strong and cutting back when supply reaches saturation and prices plummet.

It was one such trough that prompted Fujitsu to close its chip fabrication plant at Newton Aycliffe, in County Durham, and Siemens to pull the plug on its North Tyneside operation only 18 months after it opened.