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Amid ‘Chipageddon,’ Intel To Invest $20 Billion in New Ohio Chip Factories

·3 min read
Aaron Hawkins / Getty Images
Aaron Hawkins / Getty Images

Intel announced today that it would invest more than $20 billion in the construction of two new chip factories near Columbus, Ohio, amid a global chip shortage that many have referred to as “chipaggedon.”

See: Chipageddon Could Last Until 2023, According to Analysts
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To support the development of the new site, Intel pledged an additional $100 million toward partnerships with educational institutions to build a pipeline of talent and bolster research programs in the region, the company said in a statement. Intel CEO Pat Gelsinger will meet with President Joe Biden later today.

“Today’s investment marks another significant way Intel is leading the effort to restore U.S. semiconductor manufacturing leadership,” Gelsinger said in the statement. “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. 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.”

In a statement on the White House website, the administration said that Intel’s announcement “is the latest marker of progress in the Biden-Harris Administration’s efforts to ramp up domestic manufacturing for critical goods like semiconductors, tackle near-term supply chain bottlenecks, revitalize our manufacturing base, and create good jobs here at home.”

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“This investment will create 7,000 construction jobs and another 3,000 permanent jobs, another sign of the strength of the American economy,” the statement continued.

The White House added that the COVID-19 pandemic shined a spotlight on fragility in the global semiconductor supply chain. In addition, experts estimate that the global chip shortage knocked off a full percentage point from the U.S. gross domestic product last year. U.S. autoworkers faced furloughs and production shut downs as the pandemic disrupted Asian semiconductor factories, contributing to large increases in U.S. car prices, according to the White House. One-third of the annual price increases in the core consumer price index last year was due to higher car prices.

Intel added that the “mega-site” can accommodate eight chip factories — called “fabs” — and support operations and ecosystem partners.

See: Chip Shortage Leads to Projected $210 Billion Loss for Auto Industry in 2021
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“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,” according to Intel.

Planning for the first two factories will start immediately, with construction expected to begin late in 2022.

CNN reported that “Intel shares are up 3% in 2022 while rivals Nvidia and AMD have each fallen more than 10%.” Intel is also outperforming the overall chip industry, as the iShares Semiconductor exchange-traded fund is down 8% so far this year, CNN added.

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This article originally appeared on GOBankingRates.com: Amid ‘Chipageddon,’ Intel To Invest $20 Billion in New Ohio Chip Factories