Intel to invest $20bn in new Ohio chipmaking complex

Intel plans to invest more than $20bn to establish two chip factories at a new manufacturing site near Ohio’s capital city of Columbus, a move that supports the Biden administration’s efforts to revitalise US manufacturing and boost domestic supply chains.

The Santa Clara, California-based company expects to begin construction later this year and bring production online in 2025. The “mega-site” in the Midwestern state will be able to accommodate up to eight chip factories — also known as fabs — across nearly 1,000 acres, the company said on Friday. The initial phase of the buildout is expected to generate 3,000 Intel jobs and 7,000 construction jobs.

The investment is the latest in a series of giant bets by Intel as it tries to make up lost ground in chip making against Taiwan’s TSMC and Samsung. The US company last year promised investments of around $100bn in two other US facilities, along with a new site in Ireland that would cost nearly as much over a number of years.

Intel said that total investment in the Ohio site could reach as much as $100bn in the next decade, “making it one of the largest semiconductor manufacturing sites in the world.”

But the company warned earlier on Friday that the investment could be slowed or cut back if Congress fails to pass legislation that would offer subsidies for semiconductor manufacturing, known as the Chips Act. The bill passed the Senate last year but has stalled in the House of Representatives.

US president Joe Biden cheered the plan for a massive new chip plant in the key political swing state from the White House on Friday, saying he wanted Congress to pass the bill “right away” and stressing the importance of “increasing our production here at home”.

“Let’s do it for the sake of our economic competitiveness and our national security,” he said at event where he appeared with Pat Gelsinger, Intel chief executive.

A global chip shortage during the Covid-19 pandemic has been made worse by snarled supply chains, hitting the car industry particularly hard.

The Ohio investment comes after Intel committed $23.5bn to expand production capacity throughout its manufacturing locations in Arizona and New Mexico last year. The site in Licking County, Ohio, will be Intel’s first new manufacturing site location 40 years.

The establishment of a new domestic manufacturing site is an effort to “help build a more resilient supply chain”, particularly in the US, Gelsinger said in a statement.

Ohio’s governor, Mike DeWine, said the complex will be the largest single private-sector investment in the state’s history.

“For decades, we have underinvested in our domestic semiconductor manufacturing capacity, which has undermined our economic and national security,” said Brian Deese, director of the National Economic Council. “That is starting to change in a big way”.

Biden added that his administration is working on securing the raw materials needed for manufacturing semiconductors in the US.