Intel building $20B Ohio chip facility amid global shortage

·3 min read
China Intel Xinjiang (Copyright 2019 The Associated Press. All rights reserved)
China Intel Xinjiang (Copyright 2019 The Associated Press. All rights reserved)

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.

The U.S. share of the worldwide chip manufacturing market has declined from 37% in 1990 to 12% today, according to the Semiconductor Industry Association, and shortages have become a potential risk.

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

It is the largest single private-sector investment in Ohio's history, on par with an agreement in 1977 that brought Honda to central Ohio, where it now employs more than 14,000 people.

Construction is expected to begin in late next year, with production coming online at the end of 2025.

“Intel’s new facilities will be transformative for our state, creating thousands of good-paying jobs in Ohio manufacturing strategically vital semiconductors," Ohio Gov. Mike DeWine said in a prepared statement.

Intel, based in Santa Clara, Calif., announced plans last year to spend $20 billion for two new factories in Arizona. It’s also pitching for European subsidies to build a big plant somewhere within the European Union and last month said it will invest $7.1 billion to expand its decades-old manufacturing operation in Malaysia home to roughly 10% of the company’s global workforce. Along with the U.S. and Malaysia, Intel also has existing plants in Ireland, Israel, Vietnam and China.

Labor shortages that

Intel is the No. 2 semiconductor manufacturer globally, with $73.1 billion in revenue last year, behind South Korean world leader Samsung Electronics with $76 billon, according market analysis from Gartner Inc..

Several chipmakers last year signaled an interest in expanding their American operations if the U.S. government is able to make it easier to build chip plants.

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

Micron Technology, based in Boise, Idaho, said it will invest $150 billion globally over the next decade in developing its line of memory chips, with a potential U.S. manufacturing expansion if tax credits can help make up for the higher costs of American manufacturing.

Industry watchers expect the demand for chips to grow even when the current shortages end because more electronics will require them.

Lawmakers have been urging House and Senate leaders to fully fund a law meant to address the semiconductor chip shortage. They want Congress to fully fund the $52 billion CHIPS for America Act, allowing for stateside investment in semiconductor factories. Not only has the chip shortage disrupted the U.S. economy, it is creating a vulnerability in the country’s defense system since eight of every 10 chips are produced in Asia, lawmakers say.

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

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

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Seewer reported from Toledo, Ohio. Associated Press writer Matt O'Brien in Providence, R.I., contributed to this report.

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