New Intel Ariz. Fabs to Have ‘Leading-Edge Capacity’: CEO

Semiconductors are “a hot topic these days,” said Intel CEO Pat Gelsinger at the groundbreaking ceremony Friday of two new fabs Intel is building in Chandler, Arizona -- a site he dubbed the “Silicon Desert.” The industry is enduring a demand-supply gap, and the global shortage “is causing chips to halt and slow production of many other areas of the economy,” he said.

Building the new fabs, the largest in the U.S., will be “part of closing that gap,” said Gelsinger. Intel isn't just committing to “building more capacity,” he said. “This is leading-edge capacity.” It's spending $20 billion to build the fabs on its Ocotillo campus, about 25 miles southeast of Phoenix, in addition to the $30 billion it already invested there.

If there was “any question” about “the increasing digitization of everything,” COVID-19 “eliminated it,” said Gelsinger. “Everything digital runs on semiconductors.” The goal of launching Intel Foundry Services, under the IDM 2.0 manufacturing initiative Gelsinger announced in March (see 2105060050), is “to open the doors of our fab wide” to serve the wafer supply needs of downstream customers, “many of them U.S. companies that are dependent on solely having foreign supply sources,” he said. “We are changing that today.”

The U.S. government sees the “criticality” of the semiconductor industry, and is taking “major steps in addressing these shortages,” said Gelsinger. With the Chips Act that cleared the Senate earlier in the year but awaits House action, “we believe that that is an important next step to continue this journey of restoring the leadership position of the U.S. in this most critical area of semiconductors,” he said. “Now is the time for the most aggressive set of public-private partnerships in our history.”

The two Intel fabs will create 3,000 “high-wage, high-tech jobs” for Arizona in addition to the 12,000 positions that Intel “already supports here,” Gov. Doug Ducey (R) told the ceremony. “For each Intel job, five additional jobs are supported in Arizona.” Intel-related jobs “had more than an $8.6 billion economic impact” on the state in 2020, he said. “Smartphones, laptops, washing machines, televisions, refrigerators, cars -- all of these somehow need semiconductor chips to operate,” said the governor. “For months now, the supply of chips hasn't been able to meet the demand, leaving us with a global shortage that has impacted the entire supply chain. Intel has stepped up in a big way to address that shortage.”