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The structure of chip production in the United States has been in the midst of the considerations of legislators and corporations in a context of global shortages of components.
by don clark
Don Clark, who lives in the San Francisco Bay Area, has been covering the chip industry for more than 30 years.
Intel selected Ohio for a new chip production complex that would cost at least $20 billion, stepping up efforts to ramp up PC chip production in the U. S. As users grapple with a persistent shortage of important components.
Intel said Friday that the new site near Columbus will first have two chip factories and directly employ 3,000 people, while creating 7,000 short-term structured jobs and tens of thousands of permanent positions at suppliers and partners.
Patrick Gelsinger, who became Intel’s lead executive last year, temporarily increased the company’s investment in production to lessen dependence on the U. S. UU. de foreign chipmakers as he presses Congress to pass incentives to increase domestic chip production. He said Intel expects to invest up to $100 billion over a decade to build up to 8 factories on the Ohio campus, tying the scope and speed of that expansion to expected federal subsidies if Congress passes an spending package known as the CHIPS Act.
“We are our chips on the table,” Mr. Gelsinger said at an event at the White House on Friday. “But this task will be bigger and faster with the CHIPS act. “
President Biden, who pushed for the legislation, argued that the CHIPS Act and U. S. investments through Intel and other chipmakers were for the economy, national security and economic competition.
“China is doing everything it can for the global market,” he said.
Intel’s resolution has broad geopolitical implications, as well as an importance for supply chains. The chips, which act as the brains of computers and many other devices, are largely made in Taiwan, over which China has expressed territorial claims. During the pandemic, they have also been outnumbered due to overwhelming demand and coronavirus-related disruptions to production and the source of hard work, raising questions about how to ensure a consistent chip pipeline.
This move is Intel’s first in a new manufacturing state in more than 40 years. The Silicon Valley-based company has U. S. plants in Oregon, New Mexico and Arizona. In March, Gelsinger decided on an existing complex near Phoenix for $20 billion expansion, which is underway.
But Gelsinger had also claimed that a new location was needed to supply more talent, water, electricity and other resources for the complex chip-making process. Intel has scoured the country for sites, prompting states to compete for one of the biggest prizes of economic progress. in recent memory.
The site selected for the new plant, in New Albany, a suburb east of Columbus, is located in a domain known for its land and reasonable housing. Nearby Ohio State University is a primary source of engineering graduates that Intel can hire. centrally to obtain materials and ship finished chips.
Construction of the first two plants is expected to begin this year and production will begin through 2025, Intel said. Allocation of economic progression in Ohio history.
Ohio Gov. Mike DeWine called Intel’s selection a “transformative” occasion for the state, the result of a procedure that began in May and ended when the company informed officials of its resolution at Christmas.
“There were 40 states competing to get those factories, and we won,” he said at an event Friday near Intel’s long-term campus.
Gelsinger, a 30-year Intel veteran who became head of software maker VMware in 2012, returned to the chipmaker last year as a leading executive as semiconductor shortages began to hamper automakers and other companies.
The shortage was partly due to the pandemic, but another thing in the long run was the shift from chip production to Asian countries that offer subsidies to corporations that build things there. The United States accounts for about 12% of global chip production. from 37 % in 1990. Europe’s share increased from 40 % to 9 % in this period.
Many of the highly complex chips come from Taiwan Semiconductor Manufacturing Company, whose proximity to China has worried Pentagon officials.
Legislation passed by the Senate with either party approval in June would provide $52 billion in subsidies to the chip industry, adding subsidies to corporations building factories in the U. S. USA Mr Gelsinger and others said they expected it to happen in the coming months.
In Europe, Gelsinger also lobbied officials for a similar set of subsidies that could build a giant Intel plant there, with a projected value comparable to that of the U. S. expansion.
Ohio has recently had a major presence in chip manufacturing. Moving to a state without chip factories presents challenges, such as obtaining entry permits and persuading suppliers of gas, chemicals and production machinery to set up offices nearby, said Dan Hutcheson, an analyst at VLSI Research. On the other hand, having factories in more states provides leverage for Washington to lobby, he said.
Intel is the only company expanding production in the United States. TSMC began structuring last year of a $12 billion complex about 80 miles from Intel’s site near Phoenix. Samsung Electronics decided on Taylor, Texas, for a $17 billion plant, with structure expected to begin in 2022.
Gelsinger’s strategy is in part on the bet that Intel can compete with TSMC and Samsung in making traditional chips for other companies. For most of its existence, Intel has only built the microprocessors and other chips it designs and sells.
The strategy is risky, as Intel has defeated its Asian rivals by packing more circuits into each silicon wafer, expanding the functions of devices such as smartphones and computers. Gelsinger said Intel is on track to catch up in several years, but possibly not be simple as those corporations continue to make new developments.
Intel “is catching up, they haven’t,” Mr. Hutcheson.
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