Shortly after recruiting Pat Gelsinger from VMware to be its new CEO, chipmaking giant Intel has announced plans to spend $20 billion building two new semiconductor fabrication plants “fabs” in the state of Arizona. 

The new fabs are aimed at boosting the company’s manufacturing capacity locally in the US, whereas the US has over the past years lost a significant percentage of its chip manufacturing capacity to other countries such as China.

• Intel will spend $20 billion building its two new fabs over the next three years with plans for both to have become operational sometime in 2023. The company’s plan puts it in major competition with Taiwanese chipmaker TSMC which’s also building a semiconductor fab in Arizona. Likewise, Korea’s Samsung is also building one in Texas.

• With its new fabs, Intel aims to boost manufacturing capacity for its own processors in the 7nm range and smaller. The company has also detailed plans to create a new division called ‘Intel’s Industry Foundry Services’, under which Intel will become more aggressive as a contract manufacturer for other companies’ processors, competing directly with industry leaders TSMC and Samsung in that area.

Intel’s new strategy under Gelsinger is dubbed IDM 2.0 (Integrated Device Manufacturing), doubling down on designing, manufacturing, and selling its semiconductor products. It’s a new path for Intel which is struggling with making a stronghold in newer product lines but as it maintains dominance in its legacy product lines.

Intel says its $20 billion investment in Arizona is expected to create over 3,000 permanent high-tech, high-wage jobs; over 3,000 construction jobs; and an estimated 15,000 local long-term jobs.

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