Intel chooses Ohio site for manufacturing investment that could grow to $100bn over ten years, but ties scale and speed to US subsidies
Intel has chosen a site near Dayton, Ohio for what it said could become the world’s biggest silicon manufacturing complex, in which it plans to invest up to $100 billion (£73bn) over ten years.
The move comes amidst a global shortage of semiconductors, although some industry watchers warned that by the time Intel’s plant comes online it could be more the case of a glut.
Intel is also seeking to challenge Asian companies by making chips for third parties, after historically making them only for its own products.
The company said it would make an initial $20bn investment into the 1,000-acre New Albany site, creating 3,000 jobs – the largest investment in Ohio’s history.
That could grow to a total of $100bn and eight total fabrication plants, what Intel called the “Silicon Heartland”, and could become “the largest semiconductor manufacturing location on the planet”, said Intel chief executive Pat Gelsinger.
But Intel linked the speed and scale of the total investment to $52bn in subsidy funding proposed in Congress, what’s known as the Chips Act.
“This project will be bigger and faster with the Chips Act,” Gelsinger said.
At a White House event on Friday with Gelsinger US President Joe Biden argued the proposed subsidy was necessary to increase US competitiveness.
“China is doing everything it can to take over the global market so they can try to out-compete the rest of us,” he said.
US Commerce Secretary Gina Raimondo added that the current semiconductor supply chain is “far too dependent on conditions and countries halfway around the world”.
The EU is also looking to boost local semiconductor production with the 2030 Digital Compass plan. Intel has said it hopes to announce a major site in Europe in the coming months as part of that strategy.
Taiwan’s TSMC is also looking to invest in European production.
Intel broke ground on two $20bn factories in Arizona in September, bringing the total number of its factories in Chandler to six.
Samsung, which took the top chip maker spot from Intel last year, and TSMC are also planning large US manufacturing investments.
Intel said sees demand outstripping supply for years to come, but some industry watchers have already raised the prospect of a semiconductor glut.
“There is a big bubble coming,” Gartner analyst Alan Priestley told Reuters.
Construction of the Ohio factories is set to begin in late 2022, with production starting in 2025.