Automotive

Intel to invest $20B for Ohio chip hub; project is ‘critical’ to automakers

Technology giant Intel Corp. said it plans to spend $20 billion on a massive chipmaking hub on the outskirts of Columbus, Ohio, which the company expects to grow to be the world’s biggest silicon-manufacturing site.

The chipmaker on Friday said it will begin construction of two fabrication plants on a 1,000-acre site in New Albany, which it expects to be operational by 2025. CEO Pat Gelsinger said the Santa Clara, Calif.-based company will use the location as a hub to research, develop and manufacture its most advanced chips and will have the option to expand to 2,000 acres and up to eight fabs.

Gelsinger, in an interview Friday on CNBC, said the project is critical to the auto industry.

“When you think of the auto industry, you’re going to see us have more to say with the auto industry leaders as they are looking to us and others to build up and satisfy their demands,” Gelsinger said.

“Because as we’ve seen, the economic impact of not having enough chips to meet the growth of that  (demand) has been inflationary and job impacting, so this is critical to support that industry, which is already very present in the heartland, and now the silicon heartland.”

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Intel has been investing billions of dollars in automotive technologies over the last few years.

The ongoing global microchip shortage has afflicted industries globally including the auto sector. President Joe Biden’s administration wants Congress to approve $52 billion to expand U.S. semiconductor manufacturing.

Biden and Gelsinger were scheduled to speak together about the Ohio news from the White House later Friday morning.

Intel last month said it plans to conduct a public stock offering for its Mobileye automotive technology unit.

Mobileye, an Israeli company that Intel bought for about $15 billion five years ago, could be valued at more than $50 billion during its U.S. IPO in mid-2022, a source previously told Reuters.

Intel’s CEO has been vocal about the need to build more chip factories in the U.S. and Europe, areas where manufacturing of the vital electronic components has declined precipitously.

Gelsinger has argued that a rebalancing of production is needed to reverse an increasing concentration in East Asia.

He has pointed to the pandemic-induced supply chain crunch and increasing geopolitical tension between China and the U.S. as evidence that Western governments need to find cash to persuade chipmakers to relocate.

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