On Tuesday, March 23, Intel announced its $20 Billion investment into two new chip factories in Chandler Arizona. Following the news, Intel stock rose by 5%, showing the immediate financial impact. This announcement and change is brought about by Patrick Gelsinger, the new CEO of Intel whose goal is to become a competitive chip manufacturer. Recently, Intel had been slacking in developing more efficient processes for chip development and performance, making TSMC(Taiwan Semiconductor Manufacturing Company) and Samsung Electronics the main leaders of this industry.
Why are chips important?
The Covid-19 pandemic has caused a shortage of semiconductors in many crucial devices. Semiconductor chips are used in phones, automobiles, and many other essential electronics, which poses a big challenge to companies such as Intel who need to provide these chips to the local market instead of losing ground due to foreign companies. The Biden administration is also attempting to address this issue with an executive order which will begin with pumping domestic manufacturing, which these factories hope to achieve.
In order to meet the needs caused by the pandemic shortage, Intel plans to partner with IBM in order to improve chip logic and packaging technologies. Currently, Intel maintains chip factories in Massachusetts, New Mexico, and Oregon domestically and Ireland, Israel, and China internationally. The current standard for many companies, such as AMD, design a processor, and have it manufactured by a third-party factory, mostly owned by TSMC or Smasung. These factories use a 5-nm process, as opposed to Intel’s 10-nm or 14-nm processes, which are more crude in comparison. In order to meet the standard of foreign competition, Gelsinger announced the timeline of meeting 7-nm chip production in the second quarter of 2021 with a commitment to manufacturing its own chips. In conclusion, Intel is hopefully progressing towards meeting the local demand and foreign standards in the chip manufacturing industry.