Intel plans two fabs in Arizona for $20B, more later


Intel announced manufacturing expansion plans on Tuesday starting with $20 billion for two new fabs in Chandler, Arizona, that will bring 15,000 jobs to the local economy.

Within a year, Intel expects to announce other new factories elsewhere in the U.S. and Europe. The next U.S. factory could be to serve U.S. Department of Defense contracts under secure controls.

Recently installed CEO Pat Gelsinger said the U.S. expansion of its fabrication capabilities is being done in advance of any U.S. or Arizona tax incentives. “This is the Intel strategy, full stop,” he said. “It does not depend on U.S. government support or state support.”

“Of course we want government investments, but we are making these without any government commitments,” he added in comments to reporters and analysts. “We’re going first and putting our chips on the table.”

Intel has been a leader in seeking U.S. government incentives for domestic manufacturing along with other major chipmakers. Gelsinger said European government assistance is also being envisioned.

The announcement comes amid a chip shortage globally that has hurt carmakers the hardest, some that have temporarily shut down factories.  For immediate relief, Gelsinger said Intel is working with partners and suppliers to provide relief. 

The Arizona fab announcement is part of Intel’s plan to be a major provider of foundry capacity in the U.S. and Europe to serve global customers.  A new standalone business unit, Intel Foundry Services, will be headed by Randhir Thakur, who will report directly to Gelsinger.

In addition, Intel plans to expand use of third-party foundry capacity.

Gelsinger wouldn’t commit to what chip nodes will be produced at the new Arizona fabs, but did announce that Intel’s 7 nm process development is going well, with the tape in of the 7 nm compute tile for Meteor Lake coming in second quarter.  Even as planning and construction of the fabs will begin this year, it could take multiple years before they are operational.

“We have a healthy CPU roadmap…with tick-tock discipline…We were slow before and are out to be the unquestioned leader in CPU and XPU AI and graphics... We’ve got a lot of work to do,” Gelsinger added.

Intel also announced a research collaboration  partnership with IBM focusing on next-generation packaging and logic technologies.

Gelsinger’s one-hour, high-energy presentation came during a mostly-pre-recorded video session and concluded with a live Q/A from analysts and reporters.  “I hope you gathered today, Intel is back,” the CEO said. “Our customers want Intel to win. Today is the first step and we are just getting started.”

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