In the midst of a global semiconductor shortage, Intel CEO Pat Gelsinger announced the company’s plans to build two brand new factories in Arizona. The company will invest $20 billion into building two new chip factories, called “fabs”, in Chandler, Arizona.
The semiconductor shortage has hit virtually every industry, from automobiles to life-saving medical technology.
Gelsinger intends for Intel to act as a foundry, partnering with western companies that specialize in semiconductor design but need a company to actually manufacture the chip.
“Intel is in a unique position to rise to the occasion and meet this growing demand while ensuring a sustainable and secure supply of semiconductors for the world,” Gelsinger said.
This announcement follows President Biden’s Executive Order to strengthen U.S. supply chains, specifically aiding American chip manufacturers with government support and new policies.
“[The] Executive Order, combined with full funding for the CHIPS Act, can help level the playing field in the global competition for semiconductor manufacturing leadership, enabling American companies to compete on equal footing with foreign companies heavily subsidized by their governments,” Intel wrote.
Right now, the semiconductor supply chain favors eastern nations like China. The average rate of chip manufacturing is now five times faster overseas than in the U.S., with 80% of chip manufacturing concentrated in Asia.
The pandemic increased the demand for semiconductors by 10-20%, with 5% projected growth in demand every year through 2030. In order to meet this demand, manufacturing capability has to increase by 56%.
“As America builds back better in the wake of the COVID-19 pandemic, significant investments in essential technologies like semiconductors are essential as part of a coordinated national manufacturing strategy. Virtually all modern technology, from 5G to AI to remote work conference calls, exists today because of the United States’ leadership in the development of the semiconductor industry. The Executive Order will help accelerate whole-of-government efforts to ensure that semiconductor manufacturing leadership continues in the U.S.”
In the long-term, Intel’s goal is to pursue large companies like Apple, Amazon, Microsoft, and Google–which are all currently importing semiconductors from the East.