Intel plans $20 billion chip manufacturing site in Ohio

[January 21, 2022]    By David Shepardson and Jane Lanhee Lee

WASHINGTON/SAN FRANCISCO (Reuters) -Intel Corp will invest $20 billion in two new plants in Ohio to make advanced chips, the company said on Friday, the first step to a "mega-site" that can accommodate eight chip factories costing $100 billion.

The planned investment includes 3,000 permanent jobs and 7,000 construction jobs on the 1,000-acre site in Licking County, just outside of Columbus.

Chief Executive Pat Gelsinger is driving Intel plans to expand, especially in Europe and the United States, as it seeks to heat up competition with global rivals and respond to a world-wide microchip shortage.

"These factories will create a new epicenter for advanced chipmaking in the U.S. that will bolster Intel's domestic lab-to-fab pipeline," Gelsinger said in a statement.

Chipmakers are scrambling to boost output after manufacturers around the world, from autos to consumer electronics, faced shortages of chips. Intel also is trying to win back its position as maker of the smallest and fastest chips from current leader TSMC, which is based in Taiwan.

Still, Intel's plans for new factories will not alleviate the current demand crunch, because such complexes take years to build. Gelsinger previously said he expected the chip shortages to last into 2023.

In September, Intel broke ground on two factories in Arizona as part of its turnaround plan to become a major manufacturer of chips for outside customers. The $20 billion plants will bring the total number of Intel factories at its campus in the Phoenix suburb of Chandler to six.

President Joe Biden's administration wants Congress to approve $52 billion to expand U.S. semiconductor manufacturing. The Senate passed a measure last June, but it has stalled in the House of Representatives.

Biden is making remarks Friday on the U.S. government's efforts "to increase the supply of semiconductors, make more in America, and rebuild our supply chains here at home," the White House said earlier.

Gelsinger will meet with Biden at the White House later on Friday, Intel said.

Planning for the first two factories will start immediately, with construction expected to begin late in 2022 and production starting in 2025. Intel said.

Samsung Electronics regained the top spot in 2021 from Intel for the first time since 2018, data from Gartner showed and Intel dropped to the second spot with 0.5% growth last year, delivering the lowest growth rate among the top 25 vendors.

(Reporting by David Shepardson and Alex Alper in Washington, Jane Lee in San Francisco, Nivedita Balu and Akriti Sharma in Bengaluru; Editing by Shounak Dasgupta, Christopher Cushing and Anil D'Silva)

 

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