Intel’s investment is intended to deal with the global chip shortage that is heavily impacting a wide variety of industries.
According to sources familiar with the matter and reporting by Reuters, chip manufacturer Intel is set to announce that it will invest $20 billion in a new chip manufacturing site near Columbus, Ohio to develop and manufacture advanced semiconductor chips. Intel will build at least two semiconductor fabrication plants.
The first step
According to sources, the initial USD 20 billion investment is the first step of what could be an eight-factory complex costing tens of billions of dollars. The company declined to comment on its plans but released a statement claiming that Patrick Gelsinger, Intel’s CEO, would disclose details of “Intel’s latest plans for investment in manufacturing leadership” as it works “to meet the surging demand for advanced semiconductors” on Friday.
Companies struggle to meet demand
The move comes as chip manufacturers such as GlobalFoundries, TSMC, and Samsung are seeking to boost production in the face of ongoing shortages. Last year, Gelsinger said that Intel planned to announce another US site before the end of the year that would eventually hold eight chip factories. The complex could cost USD 100 billion over a decade and eventually employ 10,000 people.
Intel is also seeking to open manufacturing plants in Europe, with talks intensifying with the Italian government over a USD 9 billion advanced semiconductor packaging plant.
In September 2021, Intel broke ground on two factories in Arizona as part of its attempt to become a major manufacturer of chips for outside customers. The USD 20 billion plants will bring the total number of Intel factories at its campus in Phoenix to six.
The shortage will continue
The new plants will not address the current shortage and Gelsinger stated that he witnessed it lasting until 2023.
Abu Dhabi’s Mubadala Investment Company recently made a significant investment in chip manufacturer GlobalFoundries as the company moves to open a new chip plant to answer the global shortfall.
A recent report by Gartner revealed that auto manufacturers will develop their own chips by 2025 to address the global shortage.
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