Intel has selected Ohio for a new chip manufacturing complex that would cost at least $20 billion, ramping up an effort to increase U.S. production of computer chips.
A person with knowledge of the matter said that the new site near Columbus would initially have two chip factories and would directly employ 3,000 people, while creating additional jobs in construction and at nearby businesses. It is likely to be just the beginning.
Patrick Gelsinger, who became Intel's chief executive last year, has rapidly increased the company's investments in manufacturing to help reduce U.S. reliance on foreign chip makers. If Congress approves a spending package known as the CHIPS Act, Intel could invest as much as $100 billion over a decade in its next U.S. manufacturing campus, linking the scope and speed of that expansion to expected federal grants.
If it gets funding, Mr. Gelsinger said, they will go bigger and broader. Our recovery plans do not rely on the CHIPS act.
The significance for supply chains is related to Intel's move. China has expressed territorial claims toward Taiwan, which is where most of the chips that act as the brains of computers and many other devices are manufactured. They have been in short supply because of overwhelming demand and Covid-related disruptions to manufacturing and labor supply, raising questions about how to ensure a consistent chip pipeline.
The Intel announcement is expected to be discussed by Biden administration officials.
The expansion will be discussed on a webcast on Friday. It is the first new state for manufacturing for Intel in more than 40 years. The company has US factories in Oregon, New Mexico and Arizona. A $20 billion expansion is underway after Mr. Gelsinger chose an existing complex near Phoenix.
A new location was needed to provide additional talent, water, electrical power and other resources for the complex process of making chips. Intel has 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884
The location of the new plant is in New Albany, a suburb east of Columbus, which is known for inexpensive land and housing. Ohio State University is a major source of graduates with engineering degrees. Columbus is the location of receiving supplies and shipping finished chips.
The Plain Dealer and Cleveland.com reported on the site last week. The choice was confirmed by Intel on Thursday.
The chip maker's chief executive, Mr. Gelsinger, returned to the company last year as the chip shortage began to affect other companies.
The shift of chip manufacturing to Asian countries that offer subsidies to companies that build factories there was one of the factors behind the shortage. The US accounts for 12 percent of global chip production, down from 37 percent in 1990. Europe's share has fallen from 40 percent to 9 percent.
Taiwan Semiconductor Manufacturing Company is located close to China, which has worried Pentagon officials.
The legislation passed by the Senate in June of last year provides subsidies for the chip industry and grants to companies that build new U.S. factories. The package has gotten caught up in House squabbles over the priorities of the Biden administration, though Mr. Gelsinger and others are hopeful it will pass in the coming months.
Mr. Gelsinger has been lobbying officials in Europe for a similar package of subsidies that could aid the construction of a big new Intel factory there, with a projected price tag comparable to the U.S. expansion.
Ohio did not have a chip manufacturing presence before. Obtaining permits and persuading suppliers of gases, chemicals and production machines to set up nearby offices are some of the challenges of moving to a state without existing chip factories. Lobbying leverage in Washington is provided by having plants in more states.
There are other companies that are expanding U.S. production. T.S.M.C. started construction on a $12 billion complex about 50 miles from Intel's site. Taylor, Texas, was selected for a $17 billion factory by the company.
Mr. Gelsinger believes that Intel can compete with T.S.M.C. and other companies in manufacturing chips. Intel has built only the chips it designs and sells itself.
The strategy is risky, as Intel has fallen behind its Asian rivals in packing more circuitry onto each slice of Silicon, which increases the capabilities of devices like smartphones and computers. Mr. Gelsinger said that Intel is on track to catch up over the next few years, but it will be difficult as other companies make new developments of their own.
Mr. Hutcheson said that Intel has not caught up.
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