Intel building $20B Ohio chip facility amid global shortage

Posted on

COLUMBUS, Ohio — Intel will invest $20 billion in a new computer chip facility in Ohio amid a global shortage of microprocessors used in everything from phones and cars to video games.

After years of heavy reliance on Asia for the production of computer chips, the vulnerability to shortages of the crucial components in the US and Europe was exposed as they started to emerge economically from the pandemic.

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

Two chip plants on the 1,000-acre site in Licking County, just east of Columbus, are expected to create 3,000 corporate and 7,000 construction jobs, and support tens of thousands of additional jobs for suppliers and partners, the company, and local and state enterprises. This was announced by officials on Friday.

Construction is expected to start this year and production will be online at the end of 2025.

Chip shortages have reduced the ability of US automakers to produce vehicles, and last year General Motors was first marketed by Toyota as the country’s top-selling automaker.

The US and Europe are aggressively pushing to build chip-making capacity and reduce dependence on manufacturers now mainly based in Asia.

Several chipmakers last year expressed an interest in expanding their US operations if the US government can make building chip factories easier.

  2022 Chevrolet Bolt EUV First Drive Review | Super-sized with Super Cruise

Chipmakers are diversifying their manufacturing sites in response to the shortages. Samsung said in November it plans to build a $17 billion factory outside Austin, Texas.

Micron Technology, based in Boise, Idaho, said it will invest $150 billion globally over the next decade to develop its line of memory chips, with a potential expansion of production in the US if tax credits can help offset the higher costs of the US economy. offset production.

However, the demand for computer chips continues to grow.

Lawmakers have urged House and Senate leaders to fully fund a bill intended to address the shortage of semiconductor chips. They want Congress to fully fund the $52 billion CHIPS for America Act, allowing for state investment in semiconductor factories. Not only has the chip shortage disrupted the US economy, it also creates a vulnerability in the country’s defense system as eight out of every ten chips are produced in Asia, lawmakers say.

Separate federal legislation also under consideration would create a new tax credit for investments in semiconductor manufacturing facilities.

US Secretary of Commerce Gina Raimondo welcomed the announcement.

“Intel’s work is vital to our efforts to rebuild America’s chip-building capabilities and create the kind of high-paying jobs that support a vibrant U.S. economy,” she said.

The Intel project is the largest private investment in Ohio’s history, akin to a 1977 agreement that brought Honda to central Ohio, where it now employs more than 14,000 people. The Intel jobs are expected to pay an average of $135,000 per year plus benefits, with the project slated to add $2.8 billion to the state’s annual gross product, Ohio Gov said. Mike DeWine in a statement.

  Ford stock slumps 10% over chip shortage, drags down rival GM, suppliers

“Intel’s new facilities will transform our state and create thousands of high-paying jobs in Ohio strategically producing vital semiconductors,” DeWine said.

Intel, based in Santa Clara, California, last year announced plans to spend $20 billion on two new plants in Arizona. It is also promoting European subsidies to build a major factory somewhere within the European Union and said last month it will invest $7.1 billion to rebuild its decades-old manufacturing facility in Malaysia, which employs about 10% of the global workforce. company is established, to expand. In addition to the US and Malaysia, Intel also has existing factories in Ireland, Israel, Vietnam and China.

Intel is the No. 2 semiconductor manufacturer worldwide, with sales of $73.1 billion last year, behind South Korean world leader Samsung Electronics with $76 billion, according to market analysis by Gartner Inc.

Long known for its largely white-collar workforce, Central Ohio has added high-tech jobs in recent years, with Amazon, Facebook and Google all building data centers in the region.

Related video: