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Intel has made a major announcement regarding its plan to respond to the global chip shortage. Rather than wait around for the dust to settle, the company is putting its money where its mouth is and investing $20 billion in two new chip manufacturing facilities in Ohio. Intel will also work with educational institutions to develop talent for the plants that are projected to come online in 2025. The Wall Street Journal’s Meghan Brobowsky reports:
Intel Corp. INTC +0.94%said it plans to invest at least $20 billion in new chip-making capacity in Ohio, bolstering the company’s semiconductor-production ambitions as greater demand for digital products and a global chip shortage have amplified the need for more manufacturing.
Intel said Friday it would invest in two new chip factories just outside Columbus, Ohio, to add to Intel’s effort to expand its chip-making business. The company has made more than $100 billion in investment pledges over the past year. Intel Chief Executive Pat Gelsinger said the site could eventually grow to accommodate eight chip factories, also known as FABs.
Intel will make some of its most cutting-edge processors at the new site, Mr. Gelsinger said in an interview. Planning for the first two factories will start immediately, with construction expected to begin late in 2022, he said, and production is expected to come online in 2025. The company also pledged $100 million toward partnerships with educational institutions to build a pipeline of talent and bolster research programs in the region.
Mr. Gelsinger said that chip demand remains high and that supply gaps could persist into next year and potentially even into 2024, though they show some signs of easing in the coming months.
The White House said early Friday that Intel’s investment plan augmented U.S. efforts to strengthen domestic chip-making. Governments, particularly in the U.S. and Europe, have become concerned with securing their semiconductor supply after years in which manufacturing has gravitated to lower-cost countries in Asia. The chip drought during the pandemic has only amplified those worries.
“The Covid-19 pandemic shined a spotlight on the fragility in the global semiconductor-supply chain,” the White House said.
For Mr. Gelsinger, the move is the latest step in his push to revive the company’s fortunes by restoring its position as a cutting-edge chip designer and becoming a leading chip manufacturer, including for other companies. In 2020, graphics chip maker Nvidia Corp. overtook Intel as the U.S.’s most valuable semiconductor company. Samsung Electronics Co. last year overtook Intel as the biggest chip maker by quarterly revenue. Analysts expect the South Korean company to hold on to that position when both report earnings next week.
Last year, Intel said it planned big investments in chip-making in Arizona and New Mexico and a roughly $95 billion commitment to European manufacturing.
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