Download this article in PDF format.
With no immediate end in sight to the global semiconductor shortage, some organizations and governments are announcing big moves to help solve the problem. And while the solutions may not produce the immediate results that many procurement professionals would like to see, they may be helping to create a more sustainable and reliable source of supply for the longer term.
Intel is the latest manufacturer to step up to the plate. In January, it announced plans for an initial investment of more than $20 billion in the construction of two new chip factories in Ohio. “The investment will help boost production to meet the surging demand for advanced semiconductors, powering a new generation of innovative products from Intel and serving the needs of foundry customers as part of the company’s IDM 2.0 strategy,” the company said in its announcement.
“Intel’s actions will help build a more resilient supply chain and ensure reliable access to advanced semiconductors for years to come. Intel is bringing leading capability and capacity back to the United States to strengthen the global semiconductor industry,” the company’s CEO, Pat Gelsinger, said. “These factories will create a new epicenter for advanced chipmaking in the U.S. that will bolster Intel’s domestic lab-to-fab pipeline and strengthen Ohio’s leadership in research and high tech.”
Here's the Plan
The initial phase of the Intel project is expected to create 3,000 Intel jobs and 7,000 construction jobs over the course of the build, and to support many additional local long-term jobs across a broad ecosystem of suppliers and partners. Intel is also pledging another $100 million toward partnerships with educational institutions to build a pipeline of talent and bolster research programs in the region.
Spanning roughly 1,000 acres in Licking County (just outside of Columbus), the “mega-site” can accommodate a total of eight chip factories, or “fabs,” while also supporting operations and ecosystem partners. “At full buildout, the total investment in the site could grow to as much as $100 billion over the next decade, making it one of the largest semiconductor manufacturing sites in the world,” Intel said.
The company says planning for the first two factories will start immediately, with construction expected to begin in late 2022. Production is expected to come online in 2025, when the fab will deliver the chips. Along with Intel, Air Products, Applied Materials, LAM Research and Ultra Clean Technology are also planning to establish a physical presence in the region to support the buildout of the site, with more companies expected in the future.
More to Come
Intel isn’t alone. According to the Semiconductor Industry Association, the industry has announced nearly $80 billion in new investments in the U.S. through 2025 since the beginning of 2021, including a $17 billion Samsung factory in Texas and $30 billion in investments from Texas Instruments, CNN reports.
Last month, President Joe Biden recently urged Congress to pass legislation strengthening research and development and manufacturing for supply chains to address global semiconductor shortages.
Calling the shortages a “persistent thorn in the Biden administration’s side,” CNN says the problem has “hamstrung the administration's economic recovery effort from the Covid-19 pandemic and contributed most notably to an increase in automobile prices, which account for one-third of the annual price increases in the core consumer price index.”
According to CNN, Commerce Secretary Gina Raimondo called Intel’s new chip factories a “big win for Intel, for American manufacturing, and for American consumers who can look forward to lower prices as we bring home production of semiconductors that keep our economy running.”
