Intel Prepares For $100 Billion Spending Spree Across Four US States

After securing billions in federal grants and loans, Reuters reports that the company is 'planning a $100-billion spending spree across four U.S. states' to build and expand its chip manufacturing factories. From the report: The centerpiece of Intel's five-year spending plan is turning empty fields near Columbus, Ohio, into what CEO Pat Gelsinger described to reporters on Tuesday as 'the largest AI chip manufacturing site in the world,' starting as soon as 2027. Intel's plan will also involve revamping sites in New Mexico and Oregon and expanding operations in Arizona, where longtime rival Taiwan Semiconductor Manufacturing Co is also building a massive factory that it hopes will receive funding from President Joe Biden's push to bring advanced semiconductor manufacturing back to the United States.

Gelsinger said about 30% of the $100-billion plan will be spent on construction costs such as labor, piping and concrete. The remaining will go towards buying chipmaking tools from firms such as ASML, Tokyo Electron, Applied Materials and KLA, among others. Those tools will help bring the Ohio site online by 2027 or 2028, though Gelsinger warned the timeline could slip if the chip market takes a dive. Beyond grants and loans, Intel plans to make most of the purchases from its existing cash flows.

'It will still take three to five years for Intel to become a serious player in the foundry market' for cutting-edge chips, said Kinngai Chan, an analyst at Summit Insights. However, he warned more investment would be needed before Intel could overtake TSMC, adding that the Taiwanese firm could remain the leader for 'some time to come.' Gelsinger has previously said a second round of U.S. funding for chip factories would likely be needed to re-establish the U.S. as a leader in semiconductor manufacturing, which he reiterated on Tuesday. 'It took us three-plus decades to lose this industry. It's not going to come back in three to five years of CHIPS Act' funding, said Gelsinger, who referred to the low-interest-rate funding as 'smart capital.'

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