Intel Corp. (INTC, Financial) on Friday unveiled plans for an initial investment of more than $20 billion in the construction of two new leading-edge chip factories in Ohio.
The investment will help boost production to meet the surging demand for advanced semiconductors, powering a new generation of innovative products from Intel and serving the needs of foundry customers as part of the company’s IDM 2.0 strategy, the company said in a release.
To support the development of the new site, the Santa Clara, California-based chip giant pledged an additional $100 million toward partnerships with educational institutions to build a pipeline of talent and bolster research programs in the region.
Intel’s leadership has promised to spend in excess of $100 billion in its manufacturing facilities in order to retake its dominant position among chipmakers. In 2020, it fell behind competitors Nvidia Corp. (NVDA, Financial) and Samsung Electronics Co. (XKRX:005930, Financial).
Many investors believe Intel is taking the right road back to the top, and understand that it will take time and money. Short-term profits will probably suffer, they predict, but that for the long term, investors will be rewarded. The company’s stock finished after-hours trading on Friday at $51.91, down 0.25% or 13 cents per share.
“Today’s investment marks another significant way Intel is leading the effort to restore U.S. semiconductor manufacturing leadership,” Intel CEO Pat Gelsinger said in the statement. “Intel’s actions will help build a more resilient supply chain and ensure reliable access to advanced semiconductors for years to come. Intel is bringing leading capability and capacity back to the United States to strengthen the global semiconductor industry. These factories will create a new epicenter for advanced chipmaking in the U.S. that will bolster Intel’s domestic lab-to-fab pipeline and strengthen Ohio’s leadership in research and high tech.”
U.S. Commerce Secretary Gina Raimondo applauded the announcement, saying that “Intel’s work is essential to our efforts to rebuild America’s chip building capacity and create the kinds of good-paying jobs that support a vibrant American economy.”
“Today’s announcement is monumental news for the state of Ohio,” Ohio Governor Mike DeWine said. “Intel’s new facilities will be transformative for our state, creating thousands of good-paying jobs in Ohio manufacturing strategically vital semiconductors, often called ‘chips.’ Advanced manufacturing, research and development, and talent are part of Ohio’s DNA, and we are proud that chips – which power the future – will be made in Ohio, by Ohioans.”
As the largest single private-sector investment in Ohio history, the initial phase of the project is expected to create 3,000 Intel jobs and 7,000 construction jobs over the course of the build, and to support tens of thousands of additional local long-term jobs across a broad ecosystem of suppliers and partners.
Spanning nearly 1,000 acres in Licking County, just outside of Columbus, the “mega-site” can accommodate a total of eight chip factories – also known as “fabs” – as well as support operations and ecosystem partners. At full buildout, the total investment in the site could grow to as much as $100 billion over the next decade, making it one of the largest semiconductor manufacturing sites in the world.
Planning for the first two factories will start immediately, with construction expected to begin late in 2022. Production is expected to come online in 2025, when the fab will deliver chips using the industry’s most advanced transistor technologies. Ohio will be home to Intel’s first new manufacturing site location in 40 years.
To help develop and attract a pipeline of skilled talent from within the region, Intel said it plans to invest approximately $100 million over the next decade in partnership with Ohio universities, community colleges and the U.S. National Science Foundation. These partnerships will span a range of activities, from collaborative research projects to building semiconductor-specific curricula for associate and undergraduate degree programs.
