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With World Short of Chips, Intel Plans to Spend Billions on Manufacturing
File photo of Ford plant in Dearborn, Mich. where production was slowed because of a shortage of microchips. AP Photo/Carlos Osorio
Last month, Ford Motor. Co. announced that it will cut shifts at two of its U.S. manufacturing plants in Dearborn, Mich., both of which produce the company's most popular model, the F-150 pickup truck.
The reason? Too few microchips and semiconductors, which are the nerve center of every new vehicle. Since then, a fire at a Japanese microchip facility has made matters even worse.
Microchips and semiconductors now are a manufacturing priority for the U.S.
Intel Corp. announced an ambitious construction program March 23 to expand its existing capacity. At the top of the plan was a $20-billion investment in new two new fabrication plants at the company’s Ocotillo campus in Chandler, Ariz. The estimate, announced by Intel CEO Pat Gelsinger and state officials, is for 3,000 construction jobs and several thousand permanent jobs.
The construction program was part of an overall strategy through which Intel, working with its longtime customer, IBM, will remain at the forefront of technological innovation and processing power.
Exact details of the construction were not yet ready, but Intel is known as a safety and quality-conscious owner. Two recent projects, one in Arizona and the other in Oregon, involve companies now working for Intel which potentially could compete for the new Arizona work.
Among the companies recently or currently involved in the multibillion-dollar projects are CH2M Hill and Jacobs on the engineering and design side and Hoffman Construction and Hensel Phelps Construction on the construction side, according to Dodge Data and Analytics. The recent Arizona project involved interior alterations to the Fab 42 Manufacturing Facility in Chandler. The Oregon project involves expansion of office and manufacturing space in Hillsboro.
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Automakers were surprised by strong demand for vehicles that developed despite—and in some cases because of—the pandemic. Demand for microchips also surged during the pandemic as people purchased new electronic equipment.
The Biden Administration recently made microchip and semiconductor manufacturing a national goal. Executives of Intel and its two domestic competitors, Qualcomm and Advanced Micro Devices, wrote the president last month urging his support and noting that the U.S. share of the market had dropped to 12% from 37% in 1990.
“Intel’s announcement is a great example of the benefits that come from investing in domestic semiconductor manufacturing capabilities," said U.S. Secretary of Commerce Gina M. Raimondo in a statement. "We can create jobs, strengthen our national security as well as the security and resiliency of our supply chains. And we welcome additional announcements on U.S. manufacturing commitments by other firms as well.”
