Intel has decided on where to build its new chip plant, and the honor goes to New Albany, near Columbus in Ohio. The company has acquired a 1,000-acre site and will spend not less than $20 billion on the facility.
According to Intel, the New Albany site will host the biggest chip factory in the world. It will employ more than 3,000 people directly and tens of thousands more in the supply chain and across partner companies.
Intel has plans to expand to 2,000 acres and operate fabs. CEO Pat Gelsinger says the new site could become Silicon Heartland, similar to how Intel helped start Silicon Valley.
The initial construction phase is expected to be completed by 2025, but Intel will invest up to $100 billion on the site in the ten years. It will also spend $100 million in collaboration with universities, colleges in the state, as well as the US National Science Foundation to develop a qualified workforce.
Intel has been running plants in Oregon, New Mexico, and Arizona in the US, but this is the first time it is going to a new state in four decades. The company is also expanding its existing facilities, with $20 billion earmarked for upgrading its Arizona plant.
The chip giant considered proposals from several states, although it didn’t publicize it as Amazon did with its second HQ. One other state offered more incentives, but Intel settled for Ohio because of the better regulatory framework. Also, it didn’t have to displace any residents in Ohio. However, New Albany has the added advantage of inexpensive land and proximity to the Ohio State University, a source of skilled labor.
Going to a new state presents challenges to the company. It will have to work through permits, sourcing raw materials, and moving in manufacturing equipment. However, Intel is far from a startup; hence, it is well-positioned to handle the challenges.
The global manufacturing community will surely cheer at the news, with the acute chip supply shortage plaguing multiple industries. It affects computers, game consoles, vehicles, etc. It also means the rejuvenation of the US chip industry, which has been losing ground to countries like TSMC in Asia. The US Senate has approved a $52 billion package as grants for chipmakers building new facilities in the country. The bill is currently in the House.
“Today’s announcement is monumental news for the state of Ohio,” said Ohio Gov. Mike DeWine. “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.”
“Today’s investment marks another significant way Intel is leading the effort to restore US semiconductor manufacturing leadership,” said Pat Gelsinger, CEO of Intel. “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 US that will bolster Intel’s domestic lab-to-fab pipeline and strengthen Ohio’s leadership in research and high tech.”
TSMC and Samsung have also announced new plants in the US, located in Arizona and Texas, respectively.