Comment Intel puts on a show for its biggest manufacturing announcements, with episodes every few years using a rotating cast of US CEOs and presidents.
Intel boss Pat Gelsinger and President Joe Biden were the latest to join the series, jointly announcing on Friday the chipmaker’s $20 billion investment in factories near Columbus, Ohio. The factories could be operational by 2025 and manufacture chips down to 2nm and beyond.
“This is our first major venue announcement in 40 years,” Gelsinger said onstage later in the day with Ohio Gov. Mike DeWine (R).
“Intel’s announcement today is a signal to China and the rest of the world that from now on, our essential manufactured products in this country will be made in the United States of America,” DeWine said. .
Intel’s announcement today is a signal to China and the rest of the world that from now on our essential manufactured products in this country will be made in the United States of America.
Intel has already sent CEOs and commanders-in-chief to announce the injection of billions of dollars into factories, with the presidents using the events to highlight rising US manufacturing and jobs. But the aftermath has been littered with broken promises and failed goals, in part due to Intel’s sometimes inconsistent manufacturing and product strategies.
This time around, Gelsinger has identified manufacturing as a major growth driver, as part of its Integrated Device Manufacturing 2.0 strategy. Intel has promised to expand its contract manufacturing significantly, making components that use the non-x86 Arm and RISC-V architectures, and has signed with Qualcomm, a semiconductor competitor, as a foundry customer.
Intel’s latest $20 billion commitment will be used to build two factories on a 1,000-acre site that could be expanded to 2,000 acres and eight fabs. The site will employ 3,000 people with an average salary of $135,000 and will also bring 7,000 construction jobs to Ohio, DeWine said.
You can’t fault Gelsinger for announcing the factories: its shareholders and the world, in the midst of a chip supply crisis, expect it. But not only does the news have to be seen in historical context, it remains to be seen whether Intel can deliver on the promises it made for the Ohio facilities.
In 2011, then-CEO Paul Otellini announced that Intel was investing $5 billion to complete Fab 42 when President Barack Obama visited an Intel facility in Hillsboro, Oregon. At the time, Fab 42 was to manufacture 14 nm chips, including processors for smartphones, and create 4,000 jobs.
In the end, the ad turned out to be a false promise. Intel canceled completion of Fab 42 in 2014 after manufacturing glitches and errors in markets including mobile devices. In 2016, Intel laid off 12,000 employees to prioritize its products in the data center and Internet of Things markets.
In 2017, then-CEO Brian Krzanich reiterated a commitment to complete Fab 42, this time repackaged as a new announcement with President Donald Trump. Intel said it would invest $7 billion to complete Fab 42 to manufacture 7nm chips.
Intel powered up Fab 42 in Arizona in late 2020 to manufacture not 7nm but 10nm chips. It’s the process node that’s been delayed for years due to critical manufacturing errors, causing Intel to lose its manufacturing lead over TSMC and Samsung.
Chipzilla hopes to do better on its engagements with Gelsinger, which wants to bring Intel back to its engineering roots.
In September, Intel inaugurated other factories in Arizona, which cost 20 billion dollars. Work is also underway on expanding manufacturing in Oregon and New Mexico, and overseas in Ireland.
There is a growing need to commit capacity to foundry customers and to meet increased demand for the company’s chips, an Intel spokesperson said. The register in an email.
Gelsinger underscored “the importance of building a more resilient supply chain and ensuring reliable access to advanced semiconductors in the United States for years to come. Today’s announcement is a critical milestone in our plans to achieve these goals,” the Intel spokesperson said. ®