Intel to Invest at Least $20 Billion in New Chip Factories in Ohio

Legislation passed by the Senate with bipartisan support in June would provide $52 billion in subsidies for the chip industry, including grants to companies that build U.S. factories. The package has since become caught up in House bickering over the Biden administration’s priorities, though Mr. Gelsinger and others have said they are hopeful it will pass in the coming months.

In Europe, Mr. Gelsinger has also lobbied officials for a similar package of subsidies that could aid the construction of a big Intel factory there, with a projected price tag comparable to the U.S. expansion.

Ohio has not previously had a chip manufacturing presence. Moving to a state without existing chip factories presents challenges, such as obtaining permits and persuading suppliers of gases, chemicals and production machines to set up nearby offices, said Dan Hutcheson, an analyst at VLSI Research. On the other hand, having plants in more states provides lobbying leverage in Washington, he said.

Intel is not the only company expanding U.S. production. TSMC began construction last year on a $12 billion complex about 50 miles from Intel’s site near Phoenix. Samsung Electronics selected Taylor, Texas, for a $17 billion factory, with construction set to begin in 2022.

Mr. Gelsinger’s strategy is based partly on a bet that Intel can rival TSMC and Samsung in manufacturing chips to order for other companies. For most of its existence, Intel has built only the microprocessors and other chips it designs and sells itself.

The strategy is risky, as Intel has fallen behind its Asian rivals in packing more circuitry onto each slice of silicon, which increases the abilities of devices like smartphones and computers. Mr. Gelsinger has said Intel is on track to catch up over several years, but it won’t be easy, as those companies continue to make new developments of their own.

Intel “is catching up, but they have not caught up,” Mr. Hutcheson said.

Article source: https://www.nytimes.com/2022/01/21/technology/intel-chip-factories-ohio.html