Intel to invest up to $8B in U.S. chip plants

Next-generation Intel factories will be built to produce next generation 22nm processors

Intel Tuesday announced plans to invest between $6 billion and $8 billion to upgrade multiple computer chip manufacturing plants in the U.S., and to build a new facility in Oregon.

The plan, according to the world's largest chip maker, would add between 800 and 1,000 new jobs at Intel.

"Today's announcement reflects the next tranche of the continued advancement of Moore's Law and a further commitment to invest in the future of Intel and America," Intel President and CEO Paul Otellini said today. "The most immediate impact of our multi-billion-dollar investment will be the thousands of jobs associated with building a new fab and upgrading four others, and the high-wage, high-tech manufacturing jobs that follow."

The investment is largely designed to prepare Intel's manufacturing facilities for Intel's upcoming move to a 22-nanometer (nm) manufacturing process.

Last month, Otellini told an audience at the annual Intel Developer Forum in San Francisco that Intel is on track to ship a 22nm chip in 2011. He also noted at the time that the company's first microprocessor designed for a 22nm build had already moved through an Intel fabrication plant.

"The size of the spending might seem overly large, but production at the 22nm scale is very difficult and requires incredible precision," said Dan Olds, an analyst with The Gabriel Consulting Group. "Doing it at high volume and ensuring that yields remain reasonably high is another tricky problem."

And this kind of investment into the high-tech sector, especially during a down economy, is welcome news, he added.

"This is very good news for those regions that are getting the new investment and jobs," said Olds. "The size and scale of the investment is huge and will be a considerable boon to those local economies. But it's not all that surprising. It takes a lot of money to produce large volumes of highly complex microprocessors."

Intel had already been cited by experts as a positive force in an otherwise struggling economy.

The chip maker's solid recent financial results should prove beneficial to the tech sector and the U.S. economy in general, analysts have said.

"Intel makes approximately 10 billion transistors per second. Our factories produce the most advanced computer technology in the world and these investments will create capacity for innovation we haven't yet imagined," said Brian Krzanich, a senior vice president with Intel, in a statement. "Intel and the world of technology lie at the heart of this future. Contrary to conventional wisdom, we can retain a vibrant manufacturing economy here in the United States by focusing on the industries of the future."

Intel's investment will fund upgrades of two manufacturing plants in Arizona and two in Oregon. The company said the new facility going up in Oregon is slated to begin producing chips in 2013.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com.

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