WASHINGTON/SAN FRANCISCO- Intel Corp said on Friday it would invest more than $20 billion in two new chip-making plants in Ohio, as it looks to boost its production capacity amid a global shortage of semiconductors that are used in everything from smartphones to cars.
The move is part of Chief Executive Officer Pat Gelsinger's strategy to restore Intel's dominance in chip making and reduce America's reliance on Asian manufacturing hubs, which have a vice-like grip on the market.
"These factories will create a new epicenter for advanced chipmaking in the U.S. that will bolster Intel's domestic lab-to-fab pipeline," Gelsinger said in a statement.
While chipmakers are scrambling to boost output, Intel's plans for new factories will not alleviate the current supply crunch, because such complexes take years to build. Gelsinger previously said he expected the chip shortages to last into 2023.
To dramatically increase chip production in the United States, the Biden administration is making a big push to convince Congress to approve $52 billion in funding.
"This project is a crucial step in growing America's domestic chip manufacturing capacity," Deputy Secretary of Commerce Don Graves said in a separate statement, referring to Intel's announcement. Gelsinger will meet with Biden at the White House later on Friday, Intel said.
Intel lost out to Samsung Electronics Co Ltd as a top semiconductor vendor in 2021 and it dropped to the second spot with 0.5% growth last year, delivering the lowest growth rate among the top 25 vendors, data from Gartner showed.
As part of its turnaround plan to become a major manufacturer of chips for outside customers, Intel broke ground on two factories in Arizona in September. The $20 billion plants will bring the total number of Intel factories at its campus in the Phoenix suburb of Chandler to six.
The planned investment in Ohio in what could be an eight-factory complex will cost tens of billions of dollars and create 3,000 permanent jobs and 7,000 construction jobs on the 1,000-acre site in Licking County, just outside of Columbus.
Intel's new investment is expected to attract partners and semiconductor equipment and materials suppliers.
Air Products, Applied Materials, LAM Research and Ultra Clean Technology have shown interest in establishing a presence in the region, Intel said.
Planning for the first two factories will start immediately, with construction expected to begin late in 2022 and production starting in 2025.
(Reporting by David Shepardson and Alex Alper in Washington, Jane Lee in San Francisco, Nivedita Balu and Sweta Singh and Akriti Sharma in Bengaluru; Editing by Shounak Dasgupta, Christopher Cushing and Anil D'Silva) ((Akriti.Sharma@thomsonreuters.com))