Intel to spend up to $20 billion on U.S. chip plants in Arizona

Intel plans to expand its chip manufacturing capacity as the compnay announced plans to spend as much as $20 billion to build two chip fabs in Arizona and to open up its fabs to outside customers.

Intel snail

Stephen Nellis for Reuters:

The move by CEO Pat Gelsinger on Tuesday aims to restore Intel’s reputation after manufacturing delays sent shares plunging last year. The strategy will directly challenge the two other companies in the world that can make the most advanced chips, Taiwan’s Semiconductor Manufacturing Co Ltd (TSMC) and Korea’s Samsung Electronics Co Ltd.

In an interview with Reuters, Gelsinger said Intel has “fully resolved” its problems with its most recent manufacturing technology and is “all systems go” on chips for 2023. It now plans a massive manufacturing expansion.

That will include spending $20 billion on two new factories at an existing campus in Chandler, Arizona, that will create 3,000 permanent jobs. Intel will then work on future sites in the United States and in Europe, Gelsinger said.

Intel will use those factories to make its own chips but also open them to outside customers in what is called a “foundry” business model in the chip industry. Gelsinger said the new factories will focused on cutting-edge computing chip manufacturing… But even as Intel jumps into competition with TSMC and Samsung, it also plans to become a larger customer of theirs by turning to them to make subcomponents of its chips called “tiles” to make some chips more cost-effectively.

MacDailyNews Take: Currently, Intel’s “cutting-edge computing chip manufacturing” means larger, hotter, inefficient, and slower – which is why Apple is in the process of dumping them out of Macs while thoroughly embarrassing Intel in the process.

Gelsinger talks a lot. He has a big pocketbook. He’s a new CEO with a lot of big plans. We’ve seen and heard it all before.

We’ll have to see some actual “cutting-edge computing chip manufacturing” out of Intel before we believe he’s not just blowing Intel’s piggybank and even more hot air than our Intel-based MacBook Pros.

11 Comments

  1. Intel is an American company. I want them to be successful. But I suggest that Intel’s CEO Patrick Gelsinger ask himself, “What would Intel’s founders do if they were in my situation?” Gordon Moore and Robert Noyce would likely say, “Hey Pat, cut the crap with the lame Justin Long commercials, and get back to engineering and manufacturing the fastest computer chips in the world.”

  2. While I do think Intel will eventually get beyond the 14 nm stage, them stating they expect to be shipping full CPUs in full production quantities at the 7 nm node by 2023 still puts them two or more years behind the rest of the industry. Where are they at with 14 nm — the 14+++++++++ stage now?

    Yes, with the way Intel does things Intel’s 7 nm node will be roughly equivalent to TSMC’s (and others) 5 nm node, but those non Intel foundries have been shipping production quantity chips based upon their 5 nm node for a while now. By some time in 2023 I expect some of those non Intel foundries to be doing full production quantities of chips at the 3 nm node making Intel still a full node behind.

    As end users we typically focus on the fact that in general a lower node means faster and lower power, but there are other reasons too. Just as one example: you can pack more transistors and thus more functionality into a given area. Thus you can either get more chips or more transistors in the same number of chips on a given wafer size. This leads directly to better cost per functionality provided. (Which really was the underlying premise that Moore put forth all those years ago. His premise was NOT about doubling the number of transistors in a chip in a given time interval.)

    Intel is the largest “super tanker” in the chip world. It will take some time to turn that ship to follow a more productive course. Hopefully the drive will not be messed up by many, many layers of people that have been stuck in the way they’ve been doing things for the past decade.

    1. Well stated, but you may be slightly neglecting that each succesive chip reduction is beginning to hit the wall, and being all the more difficult to achieve. Moore’s Law is ending, this helps Intel catch up.

  3. At least Intel is investing in the USA. I hope they leap frog that plant to 3nm, which is coming next year.

    I wish Apple would invest and build at least some iPhone production capacity in the USA.

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