Intel to Spend $200 Billion Building Chip Factories

NEW YORK -
The symbol for Intel appears on a screen at the Nasdaq MarketSite, in New York. (AP Photo/Richard Drew, File)

Manufacturing giant Intel will spend $200 billion to build two chip factories in Chandler, Arizona. It will serve as an alternative to Asian chip factories that many American companies rely on.

Intel is one of the few companies that combines chip design and chip manufacturing. The announcement comes during a global chip shortage and worries that the United States is lagging behind competitors in semiconductor manufacturing, NBC News reported.

Intel said it will be partnering with IBM to “enhance the competitiveness of the U.S. semiconductor industry and support key U.S. government initiatives.”

“Intel is and will remain a leading developer of process technology, a major manufacturer of semiconductors, and the leading provider of silicon globally,” CEO Pat Gelsinger said.

Politicians have expressed concern that a reliance on overseas factories leaves the international chain lines vulnerable and hampers American businesses. In February, President Joe Biden used executive action to review the American chip companies, to “level the playing field in the global competition for semiconductor manufacturing leadership, enabling American companies to compete on equal footing with foreign companies.”

Intel will also serve as a manufacturing partner for companies that design chips but need a manufacturer, with a focus on the chips used for mobile devices. Intel suggested that companies including Amazon, Google and Microsoft would be utilizing Intel’s chip production.

Intel currently operates four semiconductor factories in the United States, and several abroad, including one in Israel.

The international chip market is expected to be worth up to $100 billion by 2025.

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smarcus@hamodia.com