Intel Corp. is expanding its semiconductor manufacturing rapidly in order to meet current and future capacity issues facing the supply chain.
Part of this expansion is building two fabs at its Ocotillo campus in Chandler, Arizona, for $20 billion, which the company recently broke ground on. These two fabs will be used to manufacture state-of-the-art semiconductors as well as serve as Intel’s recently launched foundry services. Intel already signed up two big names for its foundry services in Amazon and Qualcomm.
Now, the company is moving to invest another $20 billon in the construction of two leading-edge chip factories in Ohio. The plan to build the fab in Licking County, Ohio, was reported last week after sources close to the situation leaked the news after months of speculation.
Intel said the fabs will help boost production to meet the surging demand for semiconductors as well as serve the needs of its foundry customers. To support the development of the site, Intel pledged an additional $100 million toward partnerships with educational institutions to build a pipeline of talent and bolster research programs.
The supply chain is currently in a chip shortage due to the COVID-19 pandemic. The shortage has hit many markets hard including the automotive sector, which has been struggling to find necessary capacity for more than a year. According to the Semiconductor Industry Association (SIA), demand for chips is not expected to slow any time soon with an expected 5% rise in demand coming in the next decade.
The current site in Licking County, Ohio, before construction begins later this year. Source: Intel
Investment phases
Intel said the fab construction will be the single largest private-sector investment in Ohio’s history with the initial phase of the project expected to create 3,000 Intel jobs and 7,000 construction jobs over the course of the build. The project will also support tens of thousands of additional local long-term jobs across an ecosystem of suppliers and partners.
The site will span 1,000 acres in Licking County, which is just outside of Columbus. The site can support up to eight chip factories and support operations and ecosystem partners. Intel said the total investment in the potential mega-site could reach as much as $100 billion over the next decade — making it one of the largest semiconductor manufacturing sites in the world.
The plan is to start construction on the two fabs later this year with production expected to come online in 2025.
Companies on board
As part of the official announcement, Air Products, Applied Materials, LAM Research and Ultra Clean Technology have indicated plans to establish a physical presence in the region to support the buildout of the site. Intel expects more companies to be announced in the future.
"The impact of this mega-site investment will be profound," said Keyvan Esfarjani, Intel senior vice president of Manufacturing, Supply Chain and Operations. "A semiconductor factory is not like other factories. Building this semiconductor mega-site is akin to building a small city, which brings forth a vibrant community of supporting services and suppliers. Ohio is an ideal location for Intel's U.S. expansion because of its access to top talent, robust existing infrastructure, and long history as a manufacturing powerhouse. The scope and pace of Intel's expansion in Ohio, however, will depend heavily on funding from the CHIPS Act."
Last year, the Senate passed the United States Innovation and Competition Act (USICA), which includes funding for Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, a bill that would help to increase U.S. domestic semiconductor manufacturing. The bill is currently with the House of Representatives. The bill would provide $52 billion in federal investments for domestic semiconductor research, design and manufacturing and may be part of the funding for the new Ohio facility.
