Intel invests at least $20 billion in new chip plants in Ohio

Intel has chosen Ohio for a new chip manufacturing complex that will cost at least $20 billion, stepping up efforts to increase U.S. computer chip production as a consumer. struggling with a prolonged shortage of key ingredients.

Intel on Friday said the new site near Columbus will initially house two chip factories and will directly employ 3,000 people, while creating 7,000 short-term construction jobs and tens of thousands of permanent positions. at suppliers and partners.

Patrick Gelsinger, who become the CEO of Intel last year, yes rapidly increase the company’s investments in manufacturing to help reduce U.S. reliance on foreign chipmakers while Lobbying Congress through incentives to increase domestic chip production. He said Intel hopes to invest up to $100 billion over a decade to build up to eight factories on the Ohio campus, linking that scope and speed of expansion with projected grants. ​of the federal government if Congress passes a spending package called CHIPS Act.

“We’re putting our chips on the table,” Gelsinger said at the White House event on Friday. “But this project is going to be bigger and faster with the CHIPS Act.”

President Biden, who pushed for the legislation, argued that the CHIPS Act and American investments by Intel and other chipmakers were critical to the economy, national security and economic competition. economic.

“China is doing everything to dominate the global market,” he said.

Intel’s move has wide-ranging geopolitical implications, as well as implications for supply chains. Chips, which act as the brains of computers and many other devices, mostly made in Taiwan, which China has expressed territorial claims to. During the pandemic, they are also short of supply due to overwhelming demand and coronavirus-related disruptions to production and labor supply, raising questions about how to ensure a consistent chip pipeline. .

The move is Intel’s first transition to a new manufacturing state in more than 40 years. The company is headquartered in Silicon Valley, with US factories in Oregon, New Mexico and Arizona. In March, Mr. Gelsinger selected an existing complex near Phoenix for a $20 billion expansion, which is already underway.

But Mr. Gelsinger also insists that a new location is needed to provide more talent, water, electric power and other resources to the complex process of chipmaking. Intel has been fighting for the country for places, spurring countries to compete for one of the biggest economic development awards in recent memory.

The site chosen for the new factory, in New Albany, an eastern suburb of Columbus, was in an area known for its affordable land and housing. Nearby Ohio State University is a major source of engineering graduates that Intel can employ. Columbus is also centrally located for sourcing and shipping finished chips.

Intel says construction on the first two plants is expected to begin this year and start production in 2025. The site, which Mr. Gelsinger called a catalyst for a new, broader “Silicon Heartland,” 1,000 acres and is expected to be the largest economic development project in Ohio’s history.

Mike DeWine, governor of Ohio, called Intel’s selection a “transformative” event for the state, the result of a process that began in May and ended when the company notified the official about his decision at Christmas.

“There were 40 states competing to get these factories — and we won,” he said at an event Friday near the future Intel campus.

Mr. Gelsinger, a 30-year Intel veteran who became a director of software maker VMware in 2012, returned to the chipmaker last year to become chief executive as shortages eased. semiconductor starts car manufacturers lame and other companies.

The shortage is partly rooted in the pandemic, but another long-term factor is the shift of chip production to Asian countries that provide subsidies to companies building factories there. The United States accounts for about 12% of global chip production, down from 37% in 1990. Europe’s share has fallen to 9% from 40% during that period.

Many of the most advanced chips come from Taiwan Semiconductor Manufacturing CompanyIts proximity to China has worried Pentagon officials.

The bill, passed by the Senate with bipartisan support in June, would provide $52 billion in subsidies to the chip industry, including funding for companies that build factories in the US. The bid has since been embroiled in a House debate over the Biden administration’s priorities, although Mr Gelsinger and others have said they expect it to pass in the coming months.

In Europe, Mr. Gelsinger has also lobbied officials for a similar subsidy package that could support the construction of a large Intel factory there, at a projected price comparable to the expansion of USA.

Ohio hasn’t had a major chip manufacturing presence lately. Moving to a state without existing chip factories will pose challenges, such as obtaining permits and convincing gas suppliers, said Dan Hutcheson, an analyst at VLSI Research. Burning, chemical and manufacturing machinery set up offices nearby. On the other hand, having factories in more states provides lobbying leverage in Washington, he said.

Intel isn’t the only company expanding production in the US. TSMC began construction last year on a $12 billion complex about 50 miles from Intel’s site near Phoenix. Samsung Electronics chose Taylor, Texasfor a 17 billion dollar factorywith plans to start construction in 2022.

Mr. Gelsinger’s strategy is partly based on a bet that Intel can compete with TSMC and Samsung in making chips to order for other companies. For most of its existence, Intel built only microprocessors and other chips that it designed and sold.

This strategy is risky, as Intel has lagged behind its Asian rivals in packing more circuitry into each piece of silicon, which has boosted the capabilities of devices like smartphones and computers. Mr. Gelsinger said Intel is on track to catch up over the next few years, but that won’t be easy, as these companies continue to create new developments of their own.

“Intel is catching up, but they haven’t caught up yet,” Mr. Hutcheson said. Intel invests at least $20 billion in new chip plants in Ohio

Fry Electronics Team

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