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Intel COO: Ohio plant a ‘critical project’ for semiconductor industry

Intel COO Keyvan Esfarjani joins Yahoo Finance Live to discuss Intel’s $20 billion Ohio semiconductor chip plant investment, supply chain woes, supporting U.S. research and development, and the outlook for the semiconductor industry.

Video Transcript

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BRIAN SOZZI: Welcome back. Later this morning, President Biden will join Intel in celebrating breaking ground at its newest US manufacturing site in Ohio-- chipmakers investing $20 billion into a new semiconductor manufacturing site that is expected to generate thousands of high-paying, high-tech jobs. For more on this, we welcome in Intel Chief Operations Officer Keyvan Esfarjani.

Keyvan, good to see you here. Congrats on that opening. Take us through the build-out of this building. When does it open, and what do you-- how do you plan to get this up to speed?

KEYVAN ESFARJANI: Hey, good morning, and thank you for having us. Today is a very, very exciting day here in Ohio. We are actually celebrating our groundbreaking. This is such a critical project for Intel and the overall semiconductor industry.

And the project, actually, is ahead of schedule. We're starting the construction as we speak. And it takes about three to four years to get it off the ground.

And, of course, we need all the support, all the partnership we need. We're gonna be hiring about 3,000 or so Intel employees. But, of course, with that comes all the support infrastructure with construction, you know, about 7,000 construction workers-- this is for the initial phase-- and all the supporting infrastructure that's going to be needed in order to really bring this capability up and running. Very, very exciting day here in Ohio.

JULIE HYMAN: Keyvan, it's Julie here. As we look at the number of chips, the percentage of chips that are made in the United States, it's about 12% today, according to the Semiconductor Industry Association. That compares with 37% in 1990. So it was never the majority, but still, it's much smaller now.

KEYVAN ESFARJANI: Yes.

JULIE HYMAN: What do you think that number can get to as we start to see a rebuilding of the domestic production industry?

KEYVAN ESFARJANI: No, it's a great question. This is just the initial phase of really regaining back that leadership that, remember, chips and semiconductors was really pioneered here in the United States. And over time, this industry sort of disseminated all the way from 40% down to now about 12%, 10%.

So this is call to action. This is the initial phase. And this is-- the infrastructure that we're building in Ohio has a massive capability to scale. I would say, you know, it's going to be a decadelong sort of effort, not just by Intel, by the whole industry. And we're hoping this number can easily go up to 20% or even more.

But clearly, this is the start of it. And we're very, very encouraged by the bipartisan support of the administration to make sure that the public and private partnership is here to ensure a project like this to regain back the leadership of semiconductor industry is really moving forward at the fastest pace possible.

BRIAN SOZZI: Keyvan, I can't think of a better person to ask than you, the CEO of Intel, about the state of the chip supply production or the supply chain around the world. Are these bottlenecks starting to ease, and when might the stresses on the system end?

KEYVAN ESFARJANI: You know, I would say what COVID did, and what we learned from the last couple of years, is that when you have a supply chain of such a critical element of what basically powers our daily lives, like chips, it's so crucial that you can't have it to be concentrated only in one region of the world.

As you know, 80% of the chip supply of the world is coming from the Asia region. So here we are. I would say, of course, the overall constraint has slowed down. But still, there are elements of the supply chain that are still constrained.

For Intel, we have brought the capacity on board. I would say, for our part, you know, we are actually doing better. But we still have components that are not necessarily built by Intel, but many of our customers are still constrained by them. This is going to take multi years. But for now, I would say it's better than what it was before. But we still have a lot more work to do.

And, really, we got to position ourselves for the long term. And that's why a project like this in Ohio to really bring on the onshoring of the semiconductor capability is more critical than ever before.

JULIE HYMAN: Keyvan Esfarjani, thank you so much for joining us. Great to catch up with you while you're on the ground there-- the chief operations officer at Intel talking about the project that's getting underway there. Thank you so much. Appreciate it.

KEYVAN ESFARJANI: Thank you. Glad to be with you.

JULIE HYMAN: And it's interesting as we see that--

BRIAN SOZZI: So not over.

JULIE HYMAN: --project going up. Yes.

BRIAN SOZZI: Not over in terms of, like, supply chain bottlenecks easing, but they are improving. But what a shot. What a shot that is, this $20 billion plant-- new jobs, high-paying jobs. Good for Intel. They can use a win.