Bring It All Home: Intel to Build World’s Largest Microprocessor Factory in Ohio, Digital Platforms & Services
Intel will invest more than US$20 billion to build two microprocessor manufacturing plants in Licking County (so named because European settlers found many salt pans in the area) 30 miles from the city of Columbus , Ohio. The factories will be massive and produce chips down to 2 nanometers (nm) and even smaller by 2025.
Intel adds that over the next 10 years, a total of eight new smelters will be built at a cost of $100 billion and the entire site will eventually cover 1,000 acres. The new factories will supplement production from Intel’s facilities in Chandler, Arizona. Last year, the company invested $20 billion to build two new factories in the southwestern state. Work is also underway to expand Intel facilities in New Mexico and Oregon. This is a serious and very costly undertaking and indicative of the enormous change that is underway in the attitude of the United States towards imported computing and communication technologies.
Republican Governor of Ohio, Mike DeWine, commented, “Intel’s announcement…is a signal to China and the rest of the world that from now on our essential manufactured goods in this country will be made in the United States of America.” America. His remarks reflect the reality that Intel’s announcement has a political dimension as well as economic and technological aspects. For several years, successive US administrations have imposed technological sanctions on China. Huawei, ZTE and other Chinese tech companies are now barred from playing in markets in North America, much of Europe, Australasia, Southeast Asia and other parts of the world and it seems unlikely that they will ever be allowed to return.
This geopolitical reality has been accentuated by the Covid-19 pandemic and the resulting disruption to the global supply chain. The United States is determined that the nation will do much more on its own, for itself, in the years to come, as an increasingly confident and aggressive China flexes its muscles. The PRC claims it will be self-sufficient and self-sufficient in manufacturing advanced microprocessors by 2024 or 2025.
US President Joe Biden commented: “China is doing everything it can to conquer the world market so that it can try to outdo us and have many applications, including military applications. He used Intel’s announcement to encourage lawmakers to pass the CHIPS (Creating Helpful Incentives to Produce Semiconductors for America Act. See what they did there? Clever, eh?) US bill on competition.
The CHIPS Act would provide $52 billion for domestic semiconductor production in the United States and incentives to invest in new semiconductor manufacturing facilities in the country. Intel is a strong supporter of the legislation. The law passed the Senate, but has been stalled in the House for eight months and Mr Biden has now been in office for a year and there is pressure to get CHIPS into law by now. on February 18 (i.e. in just four weeks), because failing to pass it would trigger another disruptive and unnecessary government shutdown.
When announcing the huge new investment plan, Intel CEO Pat Gelsinger said it underscores “the importance of building a more resilient supply chain and ensuring reliable access to advanced semiconductors in the United States for years to come”. Today’s announcement is a crucial step in our plans to achieve these goals.
However, analysts and academics point out that while government legislation and Intel’s massive investment program are more than welcome, they alone will not be enough to make US chip supplies completely independent of foreign companies. , because huge amounts of testing and packaging of microprocessors are done overseas (mainly in Southeast Asia) and bringing them back to the United States will be a long, complex and expensive task. Currently, the United States is only responsible for 3% of chip packaging.
Ironically, it was only last month that Intel announced it would invest $7 billion to build a state-of-the-art testing and packaging facility in Malaysia. Why? Because salary costs are five times cheaper than in the United States. Meanwhile, it’s unclear whether or not the United States would be able to source all the raw materials it would need to continuously power and operate the new chip foundries without relying on imports itself. Probably not.
Intel’s competitors in Asia are also increasing the pressure by increasing their chipmaking capabilities. South Korea’s Samsung is spending $17 billion on a new chip factory in Texas, and the Taiwan Semiconductor Manufacturing Company (TSMC) is investing $12 billion on a new factory in Arizona.
Intel, with more than $73 billion in annual revenue, is the world’s second-largest semiconductor supplier, having lost the top spot last year to Samsung, which has $76 billion in revenue.