COLUMBUS, Ohio (AP) — Chipmaker Intel said Friday it will invest $20 billion to build a new factory in Ohio, an effort to help ease a global shortage of chips that power everything from phones to cars to home appliances. , while simultaneously signaling the giant company's commitment to manufacturing critical technology products in the US
The move could also create a new tech hub in central Ohio as related businesses that support chip manufacturing open new facilities and bring expertise to the region.
Intel said two planned factories, or fabs, would support its own line of processors, as well as its new “foundry” business, which would make chips designed by other companies. Existing chip foundries produce a huge number of custom chips, mostly in Asia. Currently, the business is dominated by Taiwan Semiconductor Manufacturing Co., or TSMC.
The future manufacturing site aims to meet multiple needs, Intel CEO Patrick Gelsinger said during an event at the White House. Chips made there will not just ease pressures on the supply chain, he said, but also strengthen US national security while bringing more tech jobs to the region.
The two plants on a 1,000-acre site in Licking County, just east of Columbus, are expected to create 3,000 corporate jobs — many of them highly skilled — and 7,000 construction jobs. The facility will support tens of thousands of additional jobs for suppliers and partners, Intel and local and state officials said Friday.
“A semiconductor factory is not like other factories,” said Gelsinger, a former Intel executive who will return to the company as CEO in 2021. “It's more like a small town that supports a vibrant community of services, suppliers and ancillary businesses. You can think of this as a magnet for the entire technology industry.”
President Joe Biden used Intel's announcement in Ohio to push a $52 billion bill pending House approval that would invest in the chip sector and help ensure more U.S. manufacturing.
“We're going to invest in America,” Biden said at the White House. “We're investing in American workers. We'll write everything we can, 'Made in America,' especially those computer chips.”
Construction is expected to begin this year, with production coming online in late 2025. The company is also investing an additional $100 million for a training pipeline to help provide jobs for the facility. Total investment could exceed $100 billion over the decade, with six additional plants, Gelsinger said.
Intel said one of the products it will make in Ohio is the Intel 18A, “one of the most advanced chips ever made,” according to Forrester analyst Glenn O'Donnell. They will likely be used in high-end computers popular with video game enthusiasts and needed for the data centers run by tech giants such as Amazon and Microsoft.
Gelsinger said he expects the Ohio site to also provide specialty chips for cars — a priority for U.S. consumers and officials — and other products, such as mobile devices.
Intel's location in Ohio could help relieve pressure on the company's other production lines.
But making more computer chips in the U.S. won't fully protect the industry from supply chain disruptions and shortages because the chips will be shipped to Asia for assembly and packaging, said Nina Turner, a researcher at IDC.
After years of heavy reliance on Asia for computer chip production, the vulnerability to shortages of critical components has been exposed in the US and Europe as they begin to emerge economically from the pandemic.
The U.S. share of the global chipmaking market has fallen from 37 percent in 1990 to 12 percent today, according to the Semiconductor Industry Association, and shortages have become a potential risk.
Chip shortages have limited the ability of U.S. automakers to produce vehicles, and last year, General Motors unspecified by Toyota as the country's top automaker for the first time.
The US and Europe are aggressively pushing to build chip manufacturing capacity and reduce reliance on manufacturers now based in Asia. Semiconductor companies are also trying to diversify their operations to avoid bottlenecks caused by problems — such as a natural disaster or pandemic lockdown — in a particular region.
Several chip makers last year expressed interest in expanding their US operations if the US government is able to facilitate the construction of chip factories. Samsung said so in November plans to build a $17 billion plant out of Austin, Texas.
As Biden mentioned, lawmakers urge House and Senate leaders to fully fund a law intended to address the shortage of semiconductor chips. They want Congress to fully fund the $52 billion CHIPS for America Act, allowing investment in semiconductor factories.
Not only has the chip shortage disrupted the US economy, but it also creates a vulnerability in the country's defense system, as eight out of 10 chips are made in Asia, lawmakers say.
Intel executives made clear Friday that the size of its Ohio complex will depend on approval of federal subsidies sought by the Biden administration and Ohio lawmakers.
“The scope and pace of Intel's expansion in Ohio,” said a statement from Keyvan Esfarjani, Intel's senior vice president of manufacturing, “will depend heavily on funding from the CHIPS Act.”
The Intel project is the largest single private sector investment in Ohio history, unlike a 1977 deal that brought Honda to central Ohio, where it now employs more than 14,000 people.
“Intel's new facilities will be transformative for our state, creating thousands of good-paying jobs in Ohio manufacturing strategically vital semiconductors,” Ohio Gov. Mike DeWine said in a statement.
Ohio beat out 40 other states for the project, DeWine said. State leaders have pledged to work with the company to provide skilled workers needed anywhere from a two-year community college education to advanced degrees.
Intel, based in Santa Clara, California, announced plans last year to spend $20 billion on two new factories in Arizona. It is also proposing European subsidies to build a large factory somewhere inside the European Union and last month said it would invest $7.1 billion to expand its decades-old manufacturing operation in Malaysia, home to about 10 percent of the world's workforce. the company's.
Intel also has factories in Ireland, Israel, Vietnam and China.
Intel is the No. 2 semiconductor maker globally, with revenue of $73.1 billion last year, behind global leader South Korea's Samsung Electronics with $76 billion, according to market analysis by Gartner Inc.
Central Ohio, long known for its largely banking and insurance workforce, has added high-tech jobs in recent years, with Amazon, Facebookand Google all data center buildings in the area.
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Seewer reported from Toledo, Ohio. Associated Press writers Matt O'Brien in Providence, Rhode Island, and Joshua Boak in Washington, DC, contributed to this report.
