Intel’s return to “unquestioned leadership” relies heavily on its ability to fab its own chips, and do it better than rival Asian foundries, TSMS and Samsung. On this front, the chipmaker has promised to spend several billions of dollars across the US and Europe on advanced foundries, of course with support from the local governments. In a recent interview with The Washington Post, Intel CEO Pat Gelsinger shared the company’s massive expansion plans in the US.
According to Gelsinger, Intel is looking to build a very large site in the US with six to eight fab modules, each of them costing $10-15 billion. The company plans to complete the project over the next decade with a total capital of over $100 billion, and in turn create 10,000 direct jobs, another 100,000 as a result of those 10,000.
The site of this “mini-city” hasn’t been finalized just yet, but Gelsinger expects to make an announcement regarding it by the end of the year. The chipmaker is engaging with a number of states across the United States to finalize the site location depending on the local energy, water, environment, universities, and skill capacity. Intel expects the site to become hubs for communities surrounding it:
We’ve–you know, our sites in Oregon and in Arizona. We have large sites in Ireland and Israel as well. These become hubs for those entire communities, and we’ve seen in all of our locations, it brings suppliers. Other companies come into it. You know, university, community college, training programs, the need for schools, restaurants, et cetera, these are really just such spectacular projects, and if you go to those communities, it’s been just entirely transformational for them. And that’s what we want to do. We want to build that kind of capability to even expand even further on U.S. soil.
The Intel CEO was critical of the global semiconductor supply chain. Expressing his concern over overreliance on Asian foundries, Gelsinger stated that the semiconductor industry is choosing a cheaper, cost-effective supply chain over a more balanced, more secure route.
If I built a factory in Asia, it would be about 30 percent less than building it in the U.S. If I built it in China, I’d be 50 percent less, and a new factory for semiconductors is 10- to $15 billion. So, if I’m going to see offsets for 30 to 50 percent of that, economically, that’s why the factories have moved to Asia. They’re simply much more cost effective, and we want to build them on U.S. soil and European soil with U.S. IP, that we really own that foundational element of the technology industry.
As I would say, it’s not like the U.S. or Europe said we don’t want semiconductors in the U.S. It’s that the Asians said we do want them in Asia, and they’ve put strong incentives in place to really underscore, make those industries much more competitive being built in Asia.
So we view this path from 39 to 12 percent, of 44 to 9 percent as really the collapse of U.S. manufacturing, and Intel is one of the few remaining companies who are manufacturing at scale in the U.S., and if the only way I can economically do that is to move our factories there, well, that’s what we’ll have to do to compete. But it’s absolutely not what we want to occur. This is so important for the entire technology industry, for the U.S. economy, and for U.S. national security.Pat Gelsinger, Intel CEO via The Washington Post