Intel Breaks Ground On $20bn Arizona Chip Plants

Intel has broken ground on two new chip factories in Arizona that are a key part of its “IDM 2.0” turnaround strategy.

The strategy, whose initials stand for “integrated device manufacturer”, is to see Intel seeking to become a major contract chip maker for outside customers.

The two chip fabrication facilities in Chandler, Arizona, called Fab 52 and Fab 62, are to be the first to include dedicated capacity for outside foundry customers.

The new foundry business, Intel Foundry Services, was announced in March along with the other components of the IDM 2.0 strategy, and is to be run as a separate business unit competing with the likes of Taiwan’s TSMC.

Investment

Intel said it has invested some $20 billion (£15bn) in the plants, which will join another four already operating at the Ocotillo campus in Chandler.

One of these is Fab 42, which became fully operational only in 2020, and uses Intel’s 10nm manufacturing process.

The new fabs are to use Intel’s most advanced processes as Intel seeks to retake the chipmaking lead from TSMC by 2025.

Intel plans to take on foundry customers including Qualcomm and Amazon’s AWS cloud unit, as well as US military contracts.

“We want to have more resilience to the supply chain,” said Intel chief executive Pat Gelsinger, who last week attended a meeting at the White House over the worldwide chip shortage.

Advanced processes

“As the only company on US soil that can do the most advanced lithography processes in the world, we are going to step up in a big way,” he said.

He said the plants would produce “thousands” of wafers per week, with each wafer holding hundreds or thousands of chips.

TSMC has also purchased land to build its first US base in nearby Phoenix, where it is planning up to six chip factories.

Gelsinger said Intel would announce another US campus site by the end of this year that would eventually hold up to eight chip plants.

Chip shortage

Analyst firm IDC said last week that additional chip capacity coming online late next year could see a glut in production by 2023.

Intel’s Chandler fabs are not planned to come fully online for several years, being intended to start operations by 2024.

Intel has said it believes the chip shortage could last into 2023.