Middle East

Intel builds $ 20 billion chip facility in the U.S. in a global shortage

The chips built into Ohio not only reduce supply chain pressure, but also strengthen US national security while bringing more technical jobs to the region, Intel CEO said.

Intel will invest $ 20 billion to build two computer chip factories on 1,000 acres of land in Licking County, Ohio, USA. (AP)

Chip maker Intel has announced that it will invest $ 20 billion to build a new factory in Ohio. This alleviates the global shortage of chips that power everything from phones to cars to appliances, while at the same time we.

According to Intel, the two planned factories, Fabs, will support their processor lines and a new “foundry” business that manufactures chips designed by other companies.

Existing chip foundries produce a huge number of custom designed chips, mainly in Asia. This business is currently dominated by the Taiwan Stacked Cable (TSMC).

Intel CEO Patrick Gelsinger said at a White House event that future production sites aim to meet multiple needs. He said the chips built there would not only reduce supply chain pressure, but also strengthen US national security while at the same time bringing more tech jobs to the region.

“Semiconductor factories are different from other factories,” said Gelsinger, a former Intel executive who returned to the company as CEO in 2021.

“It’s like a small city that supports a vibrant community of services, suppliers, and ancillary businesses. It can be thought of as a magnet across the technology industry.”

read more: Apple suffers from a shortage of chips, significantly reducing iPad production

Chips for high-end devices

President Joe Biden has used Intel’s Ohio announcement to submit a $ 52 billion bill awaiting house approval to help invest in the chip sector and increase production in the United States.

Construction will begin this year and production is expected to begin at the end of 2025. The company has also invested an additional $ 100 million in an education pipeline to provide jobs to the facility. According to Gelsinger, the total investment could exceed $ 100 billion in 10 years, and six more factories could be added.

According to Forester analyst Glenn O’Donnell, Intel said one of the products it manufactures in Ohio is the Intel 18A, “one of the most advanced chips ever manufactured.” These are popular with video game enthusiasts and may be used on high-end computers needed for data centers operated by major technology companies such as Amazon and Microsoft.

However, increasing the number of computer chips in the United States does not completely protect the industry from supply chain disruptions and shortages. This is because the chips will be sent to Asia for assembly and packaging, said Nina Turner, a research analyst at IDC.

After years of reliance on Asia for computer chip manufacturing, the United States and Europe, which have begun to emerge economically from pandemics, have exposed their vulnerability to key component shortages.

read more: Automakers warn that chip shortages will delay recovery

Causes a vulnerability in the defense system

According to the Semiconductor Industry Association, the US share of the global chip manufacturing market has fallen from 37% in 1990 to 12% today, making shortages a potential risk.

The shortage of chips is squeezing the capacity of US automakers, and last year General Motors was the first best-selling automaker in the country to leave Toyota.

Last year, several chip makers expressed interest in expanding their business in the United States if the US government could facilitate the construction of chip plants. Samsung said in November that it plans to build a $ 17 billion factory outside Austin, Texas.

As Biden hinted, lawmakers have urged House and Senate leaders to fully fund legislation aimed at addressing the shortage of semiconductor chips. They hope Congress will fully fund $ 52 billion in CHIPS for US law, allowing state investment in semiconductor factories.

Not only has the chip shortage disrupted the US economy, but eight out of ten chips are produced in Asia, creating a vulnerability in the defense system, lawmakers said.

Intel also has factories in Ireland, Israel, Vietnam and China.

According to Gartner Inc’s market analysis, Intel is the world’s second-largest semiconductor maker, with last year’s sales of $ 73.1 billion, second only to South Korea’s global leader Samsung Electronics’ $ 76 billion.

read more:
Global chip shortage to hit the next smartphone market

Source: AP

https://www.trtworld.com/americas/intel-to-build-20b-chip-facility-in-us-amid-global-shortage-53937?utm_source=other&utm_medium=rss Intel builds $ 20 billion chip facility in the U.S. in a global shortage

Back to top button