Bechtel picked to build $20 billion Intel project in New Albany

Construction is well underway on the Intel chip factory site in New Albany, seen in this September photo.
Construction is well underway on the Intel chip factory site in New Albany, seen in this September photo.

One of the world's largest engineering, construction and project management companies has been picked to build Ohio's biggest economic development project.

Intel on Monday announced that Bechtel Corp. will build its $20 billion semiconductor manufacturing project in New Albany.

“I've been impressed with the Bechtel discipline and a highly  professional approach in working with us," Keyvan Esfarjani, Intel's executive vice president and chief global operations officer told The Dispatch. "Right from the get-go, it feels like it's been clicking."

Keyvan Esfarjani, Intel's executive vice president and chief global operations officer
Keyvan Esfarjani, Intel's executive vice president and chief global operations officer

"This is a monumental opportunity for the region," said Catherine Hunt Ryan, president of Bechtel's manufacturing and technology business. "We are very humbled and incredibly excited to partner with Intel and the community to deliver on this ambitious project."

Bechtel, fresh off managing construction of Royal Dutch Shell's massive petrochemical complex near Monaca in western Pennsylvania, is headquartered in Reston, Virginia, near Washington. The engineering, construction, and project management company lacks a permanent office in Ohio, but has history in the state. It has managed construction of air-quality control systems for power company FirstEnergy and, more recently, has built new natural gas-fired power plants in Ohio.

Intel plans to build two factories, called fabs, in New Albany that will produce the tiny devices that power everything from cell phones to medical equipment to cars. Intel has said the site in Licking County could one day host as many as eight fabs, a $100 billion investment.

Bechtel will design and build a total of 2.5 million square feet of space, including 600,000 square feet of cleanrooms, pristine areas of the fabs where machines that cost millions of dollars make semiconductors. The rest of the space is the infrastructure needed to support the fabrication process.

"That really motivates us," Hunt Ryan said of projects like the one Bechtel has taken on Licking County. "That is the core of what we do."

Construction will require as much steel as eight Eiffel Towers and as much concrete as the tallest skyscrapers, Bechtel said.

The Intel project is Bechtel's first semiconductor plant in the U.S., and both companies have said the project could lead to a long relationship.

"From the start, there has been extraordinary alignment," Hunt Ryan said.

Shortages of semiconductors during the pandemic have made it tough to buy some cars, appliances and other equipment, and helped drive an effort to re-shore production of chips to the U.S. like the project in Licking County.

A state union leader praised Intel's selection of Bechtel and said the company has the size and expertise it will take to manage a project of this size.

"They've got a stellar reputation around the world," said Mike Knisley, secretary-treasurer of the Ohio State Building and Construction Trades Council.

For now, Bechtel has a small office near the Intel site. That will ramp up with construction.

Where does construction stand?

Excavation work led by Gilbane has been underway at the site in New Albany since July, and Intel and Bechtel began working together months ago.

Hunt Ryan said the next steps include building access roads and the infrastructure around the site to support the thousands of construction workers expected on the site as work ramps up.

Concrete work will start in the second half of 2023, she said. Much of the initial work also includes underground piping the fabs will need.

In the back half of the year, cranes and heavy machines are expected to move in as construction starts to go vertical and becomes more noticeable, Esfarjani said, assuming the weather allows and Bechtel can get the equipment and supplies it needs.

During the height of construction Bechtel expects, 5,000 to 7,000 workers on site, she said.

Hunt Ryan said the demand for workers at the project will outstrip local availability, and Bechtel will have to work to make the project "the site of choice" where professionals will want to come. Bechtel said it will build on its long relationship with building trades to attract workers here.

The multiple data centers in the Columbus region have been a draw for the kinds of workers Bechtel is counting on for the project.

Union leader Knisley said the unions have been working with Bechtel and Intel to make sure the companies can deliver on the project.

"It's all hands on deck and we're totally committed," he said. Unions have been undergoing the training that will be required for the project and offering programs meant to expand the workforce, he said.

Industry weakness hasn't slowed Intel project

Work on the site continues even as shares of semiconductor companies such as Intel have struggled this year amid worries about inflation, a slowing economy, rising interest rates and earnings reports that have missed Wall Street estimates.

Esfarjani says it's nonetheless important for Intel to move ahead with the Ohio project so the company is ready for future demand.

"I personally believe we’re going to have a big snapback in overall demand,’’ he said. "Who knows when that is going to be. A year or two? What has not changed is the world is moving to digital. Everything digital needs semiconductors so the demand for these factories will be more critical than ever."

Despite weak conditions now, demand for semiconductors is expected to double by 2030 and become a $1 trillion-a-year market, according to industry estimates.

Exactly what the plants will make and when they will begin making them hasn't been decided yet, Esfarjani said.

That will depend on factors ranging from customer demand to the kind of products that will be needed at the time, he said.

Another factor will be the recently enacted CHIPS Act that Congress passed over the summer. The law provides $52.7 billion in aid to the semiconductor industry along with other incentives.

Intel has said the federal money is important to making the Ohio project competitive.

Applications for that money can be submitted in February with money expected to become available in mid-2023.

At this point the focus is the construction itself is the focus, Esfarjani said.

"We are doing this. We are moving forward," he said. "As demand turns around we're going to need all this capacity," he said.

Working with the community

The project has generated some opposition from its neighbors in Licking County, and that is something Bechtel and Intel have promised to address.

"Together with Intel we will be going to the community, working with the community," Hunt Ryan said.

That applies to issues such as noise, traffic and safety along with volunteering for community projects and creating training and apprenticeship programs.

"This is the beginning of a very massive, high-tech high skilled workforce transformation of that community,'' Hunt Ryan said. "There's a lot of change being brought to the community. It can only happen in a positive way if we listen to the community and be involved in the community.''


This article originally appeared on The Columbus Dispatch: Bechtel picked to build New Albany Intel factories