Intel Corp plans to spend US$20 billion on a chipmaking hub on the outskirts of Columbus, Ohio, which the company expects to grow to be the world’s largest manufacturing site for silicon chips, a person familiar with its plans said.
The chipmaker is to begin construction of two fabrication plants on a 405 hectare site in New Albany, which it expects to be operational by 2025, the person said, asking not to be identified before a planned public announcement.
Time magazine reported the plans earlier, citing an interview with Intel CEO Pat Gelsinger, who said that the company, based in Santa Clara, California, would use the location as a hub to research, develop and manufacture its most advanced chips, and would have the option to expand to 809 hectares and up to eight fabs.
Photo: Reuters
“We helped to establish the Silicon Valley,” Gelsinger told Time. “Now we’re going to do the Silicon Heartland.”
Intel’s leader has been vocal about the need to build more chip factories in the US and Europe, areas where manufacturing of the vital electronic components has declined precipitously.
Gelsinger has argued that a rebalancing of production is needed to reverse its increasing concentration in East Asia. He has pointed to the COVID-19-pandemic-induced supply chain crunch and increasing geopolitical tension between China and the US as evidence that Western governments need to find cash to persuade chipmakers to relocate.
Adding Ohio to its list of locations, not traditionally an area associated with the technology industry, adds to the greater geographical diversity that Gelsinger has championed.
Intel is also looking at sites in Germany, Italy and France for new factories, test and assembly plants, and research and design centers, Bloomberg has reported.
Putting some of Intel’s billions of dollars in capital expenditure to work in a new location for the company — it has plants in Arizona, New Mexico and Oregon — might help bolster Gelsinger’s appeal for taxpayer money.
That in turn would help cushion some of the drag on profitability caused by the company’s ambitious plans to restore Intel’s manufacturing prowess, and muscle in on the business of outsourced chipmaking, an area dominated by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co.
This year Intel’s CEO has budgeted a record amount of spending on new factories and equipment, but, highlighting the massive and growing cost of state-of-the-art chipmaking, TSMC and Samsung are planning to raise the stakes even higher.
TSMC has set aside more than US$40 billion for capital expenditures this year. That compares with Intel’s plan to spend up to US$28 billion.
South Korea’s Samsung would likely announce its plans on Thursday next week in its earnings release. Analysts, on average, predict a companywide budget of about US$36 billion.
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