Chip manufacturer Intel will spend at least $20 billion on a new chip manufacturing site in New Albany, near Columbus, Ohio, the company announced today. The 1,000-acre location will initially play host to two chip factories, and is set to directly employ at least 3,000 people and “tens of thousands” more across suppliers and partners. Construction is reportedly due to kick off this year, with the site becoming operational in 2025.
In an interview with Time, Intel CEO Pat Gelsinger said the company expects the site to become “the largest silicon manufacturing location on the planet,” adding that it could eventually expand to 2,000 acres with eight fabs. After helping to establish Silicon Valley, Gelsinger said the new site could become “the Silicon Heartland.” Intel plans to invest up to $100 billion in the site over the next decade, as well as around $100 million in partnership with Ohio universities, colleges, and the US National Science Foundation to foster new talent.
Intel already has US factories across several states including Oregon, New Mexico, and Arizona. Ohio represents its first manufacturing expansion into a new state in over 40 years, the New York Times reports. Intel has been aggressively ramping up its investments in manufacturing capacity under its new CEO, who’s already announced a $20 billion expansion of the company’s existing Arizona complex.
Expanding into a state without an existing chip manufacturing presence brings challenges, like acquiring the correct permits, raw materials and supplies, and production machines, the NYT notes. But New Albany is known for its inexpensive land, and any manufacturing plant could benefit from engineering graduates at nearby Ohio State University.
Intel’s search for its new manufacturing hub reportedly saw states competing for the huge economic opportunity a new plant represents. Time reports that at least one other state offered more subsidies, but Ohio was a better regulatory fit and Intel didn’t want to displace current residents. It’s a marked contrast from Amazon’s hyper-competitive bidding process that eventually awarded a second HQ to New York, which it shelved following backlash from residents and local lawmakers.
The announcement comes as the world continues to grapple with an acute shortage of computer chips that has impacted everyone from games console manufacturers to automakers. The shortage has shed light on the decades-long shift of chip manufacturing from the US and Europe to Asian countries, particularly Taiwan where Taiwan Semiconductor Manufacturing Company (TSMC) in headquartered. To help reverse the shift, the US Senate approved a $52 billion subsidy package for the chip industry last June which would offer grants to companies building new US factories, but it is yet to pass through the House.
Intel’s competitors TSMC and Samsung have announced new US-based manufacturing investments of their own in Arizona and Texas, respectively. But in some officials’ eyes, Intel has the advantage of being a homegrown US company, while TSMC’s proximity to China has worried Pentagon officials.
“Today’s investment marks another significant way Intel is leading the effort to restore U.S. semiconductor manufacturing leadership,” said Intel CEO Pat Gelsinger in a statement. “Intel’s actions will help build a more resilient supply chain and ensure reliable access to advanced semiconductors for years to come. Intel is bringing leading capability and capacity back to the United States to strengthen the global semiconductor industry.”
Update January 21st, 5:39AM ET: Updated with Intel’s official announcement.
Source: The Verge