Intel builds $20 billion chip facility in Ohio amid global shortage | Economic news

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By JOHN SEEWER and ANDREW WELSH-HUGGINS, Associated Press

COLUMBUS, Ohio (AP) — Intel will invest $20 billion in a new computer chip facility in Ohio amid a global shortage of microprocessors used in everything from phones and cars to video games.

After years of heavy reliance on Asia for computer chip production, vulnerability to shortages of crucial components has been revealed in the United States and Europe as they begin to emerge economically from the pandemic.

The United States’ share of the global chip manufacturing market has fallen from 37% in 1990 to 12% today, according to the Semiconductor Industry Association, and shortages have become a potential risk.

Two chip factories on the 1,000-acre site in Licking County, just east of Columbus, are expected to create 3,000 company jobs and 7,000 construction jobs, and support tens of thousands of additional jobs for suppliers and partners, the company and local and state communities. officials announced on Friday.

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Construction is expected to begin this year, with production commissioning in late 2025.

Chip shortages have limited the ability of US automakers to produce vehicles and last year General Motors was dethroned by Toyota as the nation’s top-selling automaker for the first time.

The United States and Europe are pushing to aggressively boost their chipmaking capacity and reduce their reliance on producers now mostly based in Asia.

Most major semiconductor companies rely on chips produced in Asia, especially Taiwan, which China has long claimed as its own territory. Taiwan is the world’s leading chipmaker, accounting for 22% of global manufacturing capacity, followed by South Korea with 21%, and Japan and mainland China with 15% each, according to the SIA.

Last year, several chipmakers expressed interest in expanding their US operations if the US government is able to facilitate the construction of chip factories.

Chipmakers are diversifying their manufacturing sites in response to shortages. Samsung announced plans in November to build a $17 billion factory outside Austin, Texas.

Micron Technology, based in Boise, Idaho, said it would invest $150 billion globally over the next decade to expand its line of memory chips, with potential manufacturing expansion in the United States. whether tax credits can help offset the higher costs of American manufacturing.

However, the demand for computer chips continues to grow.

Lawmakers urged House and Senate leaders to fully fund legislation to address the shortage of semiconductor chips. They want Congress to fully fund the $52 billion CHIPS for America Act, allowing investments in the United States in semiconductor factories. Not only has the chip shortage disrupted the U.S. economy, it creates a vulnerability in the country’s defense system as eight out of 10 chips are produced in Asia, lawmakers say.

Separate federal legislation also under consideration would create a new tax credit for investments in semiconductor manufacturing facilities.

Shortages during the pandemic have highlighted the need to increase manufacturing capacity in the United States and become less dependent on Asia, said Glenn O’Donnell, analyst at Forrester Research.

“Your two biggest producers are Taiwan and South Korea and both are vulnerable points on the world stage,” he said.

US Commerce Secretary Gina Raimondo applauded the announcement.

“Intel’s work is critical to our efforts to rebuild America’s chip-building capability and create the kinds of well-paying jobs that support a vibrant American economy,” she said.

The Intel project is the largest private sector investment in Ohio’s history, tied with a 1977 deal that brought Honda to central Ohio, where it now employs more than 14,000 people. Intel jobs are expected to pay an average of $135,000 a year plus benefits, with the project expected to add $2.8 billion to the state’s annual gross product, Ohio Governor Mike DeWine said in a statement. a statement.

“Intel’s new facilities will be transformative for our state, creating thousands of well-paying jobs in Ohio, manufacturing strategically vital semiconductors,” DeWine said.

Intel, based in Santa Clara, Calif., last year announced plans to spend $20 billion on two new factories in Arizona. It is also applying for European grants to build a large factory somewhere within the European Union and said last month it would invest $7.1 billion to expand its decades-old manufacturing facility in Malaysia, which is home to approximately 10% of the company’s global workforce. Besides the United States and Malaysia, Intel also has existing factories in Ireland, Israel, Vietnam and China.

Intel is the world’s second-largest semiconductor maker, with $73.1 billion in revenue last year, behind South Korea’s global leader Samsung Electronics with $76 billion, according to market analysis by Gartner Inc.

Central Ohio, long known for a largely white-collar workforce in banking and insurance, has added high-tech jobs in recent years, with Amazon, Facebook and Google all building data centers in the region.

Seewer reported from Toledo, Ohio. Associated Press writer Matt O’Brien in Providence, Rhode Island, contributed to this report.

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