Intel’s $20 Billion Ohio Factory Could Become World’s Largest Chip Factory

Deepak Gupta
Deepak Gupta January 22, 2022
Updated 2022/01/22 at 6:31 AM

Intel on Friday said it will invest up to $100 billion (approximately Rs. 7,44,200 crore) to potentially build the world’s largest chip-making complex in Ohio, seeking to increase capacity as the global semiconductor shortage continues. affects everything from smartphones to cars.

The move is part of Chief Executive Pat Gelsinger’s strategy to restore Intel’s dominance in chip manufacturing and reduce the US’s dependence on Asian manufacturing hubs, which have tight control over the market.

An initial investment of $20 billion (approximately Rs. 1,48,800 crore) – the largest in Ohio’s history – in a 1,000-acre site in New Albany will create 3,000 jobs, Gelsinger said. That could grow to $100 billion (approximately INR 7,44,200) with eight total factories and would be the biggest investment ever recorded in Ohio, he told Reuters.

Dubbed the heart of silicon, it could become “the biggest semiconductor manufacturing site on the planet,” he said.

While chipmakers are struggling to ramp up production, Intel’s plans for new factories won’t alleviate the current supply crunch because such complexes take years to build.

Gelsinger reiterated on Friday that he expects chip shortages to persist through 2023.

To dramatically increase chip production in the United States, the Biden administration intends to persuade Congress to pass $52 billion (approximately Rs. 3,86,985 crore) in subsidies.

US House Speaker Nancy Pelosi said Friday that the House of Representatives will soon introduce a competitiveness bill to help bolster investment in semiconductors and supply chains. This includes the US$52 billion (approximately Rs. 3,86,985 crore) financing.

US President Joe Biden praised Intel’s investment Friday at a White House event with Gelsinger and again defended Congressional action.

“China is doing everything they can to dominate the global market so they can try to compete with the rest of us,” Biden said.

US Secretary of Commerce Gina Raimondo said at the event that the current semiconductor supply chain is “very dependent on conditions and countries on the other side of the world”.

Gelsinger said that without government funding, “we are still going to start the Ohio site. It’s just not going to happen that fast and it’s not going to grow that fast.”


Intel ceded the top spot as a semiconductor supplier to Samsung Electronics in 2021, dropping to second place with growth of just 0.5%, the lowest rate among the top 25, Gartner data showed.

As part of its turnaround plan to become a major chipmaker for foreign customers, Intel opened two factories in Arizona in September. The $20 billion (approximately Rs. 1,48,800 crore) factories will bring the total number of Intel factories on its campus in the Phoenix suburb of Chandler to six.

Gelsinger told Reuters he still expects to announce another major plant in Europe in the coming months.

It’s not just Intel ramping up investments. Rivals Samsung Electronics and Taiwan Semiconductor Manufacturing Co or TSMC have also announced major US investment plans and this is raising questions about a glut of chips going forward.

“We still have years ahead of us before we have a semblance of a balance between supply and demand,” said Gelsinger. “Ask yourself what part of your life is not becoming more digital.”

“Yes, the industry is booming, and maybe the metaverse will solve the world hunger for the semiconductor industry. But there is a big bubble coming,” said Alan Priestley, an analyst at Gartner.


US hoarding occurs when a technology war between the US and China is causing a decoupling of certain technologies, such as chips. Companies looking to sell technologies to China are considering based outside the US to avoid being hampered by US export control rules. China is also investing heavily in its semiconductor manufacturing capacity.

While Gelsinger also touted the economic and security benefits of ramping up U.S. chip production on Friday, Bloomberg reported in November that the Biden administration backtracked against an earlier plan by the company to boost silicon wafer production in China. for national security reasons.

Intel has been criticized for its decision to exclude references to Xinjiang from an annual letter to suppliers after the chipmaker faced backlash in China for asking suppliers to avoid the sanctions-hit region.

When asked about this at a briefing last month, White House press secretary Jen Psaki said she could not comment specifically on the company, but said that “American companies should never feel the need to apologize for defending their interests.” fundamental human rights or to oppose repression”. reiterating an appeal to the industry to ensure they are not sourcing products that involve forced labor from Xinjiang and urging companies to oppose “arming their markets to stifle support for human rights” from China.

Intel’s investment in Ohio is expected to attract partners and suppliers. Air Products, Applied Materials, LAM Research and Ultra Clean Technology have shown interest in establishing a presence in the region, Intel said.

Construction of the first two factories is expected to start in late 2022 and production in 2025.

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