Intel Goes Big & Aims To Build World’s Largest Chip Plant For $20 Billion

This is not investment advice. The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.

Chip manufacturer Intel Corporation is continuing its aggressive push to build semiconductor fabrication facilities in the United States as part of its efforts to scale up production of leading edge products and diversify its market to include contract manufacturing. In a fresh report courtesy of Time Magazine, the company has confirmed that it will build a new $20 billion plant in the American state of Ohio, with the facility intended to be the largest of its kind in the world according to statements made by Intel's chief executive officer Mr. Patrick Gelsinger to Time Magazine.

Intel Expects Ohio Facility To Be Operational By 2025 And Create 3,000 New Jobs

The news comes after Intel was originally slated to announce more local and global production plans before 2021 came to an end. These plans, as is evident today, will be separate from another $20 billion investment announced by Mr. Gelsinger early last year in Arizona in Intel's Ocotillo campus. The Ohio facility will consist of two manufacturing plants, will cover an area of 1,000 acres, employ 3,000 people and commence operations by 2025 according to the details provided by the company to Time.

Intel To Disclose New Information on 14th Gen Meteor Lake & 15th Gen Arrow Lake CPUs at HotChips 34

Prior to selecting New Albany, Ohio as the site for its latest announcement, Intel had considered 38 different announcements, revealed the company's senior vice president of manufacturing, supply chains and operations Mr.Keyvan Esfarjani in his interview as part of today's report. The company selected the town, Ohio's most prosperous, in late December and informed officials of its decision on Christmas Day. Land availability and favorable regulatory conditions were factors that influenced the decision, according to the executive.

Another factor that pushed Intel towards the Buckeye State is the availability of suitable talent. Semiconductor manufacturing involves operating and maintaining technology-intensive plants and machinery, which requires a skillset uncommon among ordinary workers. As part of its talent development efforts, Intel will also spend $10 million annually for the next ten years towards what it dubs as the intel Ohio Semiconductor Center for Innovation. This center will work with universities for tailoring education to fit the chip sector's needs, and it will partner with the Ohio State University, among others.

Intel's Ocotillo campus (pictured above) houses the Fab 42 which manufactures processors on the company's 10nm process node. Intel has committed to a $20 billion investment to build two new facilities in the Ocotillo campus. Image: Intel Corporation

Intel Chief "Scolds" Defense Under Secretary As Part Of Push To Build U.S. Chip Plants

Time Magazine's coverage also includes an interview with the Intel CEO, who shared that he expects the Ohio plant to be the world's largest of its kind once construction is finished. Additionally, he also outlined that Intel an expand the Ohio campus to cover twice the area and house up to eight manufacturing facilities, effectively transforming the state into what Mr. Gelsinger describes as a "Silicon Heartland."

To quote Mr. Gelsinger:

Our expectation is that this becomes the largest silicon manufacturing location on the planet. We helped to establish the Silicon Valley. Now we’re going to do the Silicon Heartland.

Briefing the publication on his efforts at lobbying Congress towards supporting American chip manufacturing, something which Mr. Gelsinger is ardently passionate about, he also shed some light on discussions with an Under Secretary of Defense.

Intel Arc Graphics Cards Get ‘VRAM Self-Refresh’ Feature In Latest Linux Drivers

The executive described the encounter as:

My first meeting with the Undersecretary of Defense basically scolded her. I said, Why am I explaining why this is so important to Congress, and you’re not?’”

Intel's latest announcement brings up the capital expenditure allocated by the company towards semiconductor fabrication to $40 billion. For funding these expensive projects, Mr. Gelsinger is taking actions such as divesting non-essential businesses. One such move is the sale of Intel's memory unit to the South Korean firm SK Hynix, which completed regulatory approval as 2021 came to an end. These efforts are part of a broader push by the chip manufacturing industry to set up plants in the United States, with the world's largest contract chip manufacturer, as The Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics have also announced their plans for American chip plants.