Sunday November 27, 2022

Intel selects Ohio for ‘largest silicon manufacturing location on the planet’

The company announced today that chip manufacturer Intel will invest at least $20 billion in a new chip manufacturing facility in New Albany, Ohio. This is close to Columbus, Ohio. The new 1,000-acre site will house two chip factories. It is expected to employ at least 3,000 people directly and “tens to thousands” more through suppliers and partners. According to reports, construction will begin this year and the site will be operational by 2025. Gelsinger, who helped establish Silicon Valley, said that the new site could be “the Silicon Heartland”. Intel plans to invest as much as $100 billion in the site in the next decade. In addition, around $100 million will be invested in partnership with Ohio colleges and universities. This will help foster new talent.
Intel already has US plants in several states, including New Mexico, Arizona, and Oregon. According to the New York Times, Ohio marks its first expansion into a new state for manufacturing in more than 40 years. Intel’s new CEO has aggressively increased its investments in manufacturing capacity. He’s already announced a $20 Billion expansion of its existing Arizona facility.
The NYT points out that expanding into a state with no existing chip manufacturing presence can present challenges. These include acquiring the right permits, raw materials, supplies, and machines. New Albany is well-known for its cheap land. Any manufacturing plant could benefit from engineers from the nearby Ohio State University.
According to Intel, states competed for the huge economic opportunity that a new plant offers. Time reports that at most one other state offered more subsidies. However, Ohio was a better regulatory fit than Ohio and Intel didn’t want residents to be forced out. This is a stark contrast to Amazon’s highly-competitive bidding process, which eventually awarded a second headquarters to New York. However, it was forced to rescind the decision by residents and local legislators.

Image: Intel

Image: Intel

The announcement comes as the world struggles with an acute shortage in computer chips. This has affected everyone from automakers to game console manufacturers. The shortage has revealed the decades-long shift in chip manufacturing from the US and Europe towards Asian countries, including Taiwan, where Taiwan Semiconductor Manufacturing Company is headquartered. The US Senate approved a $52 Billion subsidy package last June for the chip industry. It would grant grants to companies that are building new US factories. However, it has yet to pass the House.
TSMC and Samsung, Intel’s rivals, have announced new US-based manufacturing investment plans in Arizona and Texas. Officials believe that Intel has the advantage of being a US-based company, while TSMC’s proximity has worried Pentagon officials.
“Today’s investment is another sign that Intel is leading the effort in U.S. semiconductor manufacturing leadership,” stated Pat Gelsinger, Intel CEO. “Intel’s actions are expected to help build a more resilient supply network and ensure reliable access for years to advanced semiconductors. Intel is bringing the United States’ leading capability and capacity to support the global semiconductor industry.”
Update January 21st at 5:39 AM ET: Updated to reflect Intel’s official announcement.

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