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Intel to Build $20 Billion Semiconductor Factory in Ohio Amid Chip Shortage

January 21, 2022 by Dan McCue
Intel to Build $20 Billion Semiconductor Factory in Ohio Amid Chip Shortage
A rendering shows early plans for the new Intel processor factories in Licking County, Ohio. The $20 billion project will span nearly 1,000 acres and is the largest single private-sector investment in Ohio history. (Intel Corporation)

NEW ALBANY, Ohio —Intel, the world’s largest semiconductor manufacturer, announced Friday that it is building a new $20 billion factory outside of Columbus, Ohio.

The news is so big amid a shortage of critical microchips that President Joe Biden used it as a centerpiece for a pitch later Friday as he urged Congress to pass the CHIPS for America Act, legislation that would provide $52 billion to incentivize similar investments in the future.

The US was once at the forefront of computer chip manufacturing, but its preeminence in the field has declined in recent decades as manufacturers sought ever-cheaper chips to power everything from gaming consoles and cell phones to sophisticated medical devices, cars and trucks. 

As a result, today only about 12% of the world’s computer chips are made in the U.S., while Asian factories account for about 80%. And the COVID-19 pandemic threw a spotlight on the fragility in the global semiconductor supply chain. 

Particularly hard hit were America’s automobile manufacturers, who were forced to furlough workers and shut down production at some plants due to pandemic-driven disruptions in Asian semiconductor factories.

The shortages in this one sector alone had profound consequences for the American economy.

One-third of the annual price increases in the core consumer price index – the measure of inflation – last year was due to higher car prices alone.

According to a fact sheet released by the White House Friday morning, experts estimate that the global chip shortage knocked off a full percentage point from U.S. gross domestic product last year. 

The Ohio project, which will be Intel’s first new manufacturing site in 40 years, includes two semiconductor fabrication plants. Intel and economic development officials in Ohio said the project eventually could involve a total of eight factories and $100 billion in investment over the next decade, including Intel and its suppliers and partners.

Construction is expected to start this year with the first chips being produced by 2025.

It is the largest single private sector company investment in Ohio’s history. State officials said Friday that the project is expected to create more than 20,000 jobs, including 3,000 direct Intel jobs earning an average of $135,000 per year (plus benefits), 7,000 construction jobs over the course of the build, and tens of thousands of additional indirect and support jobs including contracted positions, electricians, engineers, and jobs in restaurants, health care, housing, entertainment and more. The project is expected to add $2.8 billion to Ohio’s annual gross state product.

Since the beginning of 2021, the semiconductor industry has announced $80 billion in new projects in the US, according to the White House. 

Other projects include a $30 billion Texas Instruments factory in Texas, a $17 billion Samsung factory in Texas and a new Global Foundries factory in New York state.

Cree, SK Group and Micron are all expecting to make additional expansions this year.

Dan can be reached at dan@thewellnews.com and at https://twitter.com/DanMcCue.

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