Chipmaker Intel is investing $20 billion in two factories in Arizona, US, as new CEO Pat Gelsinger looks to revive the company.
Yesterday, Gelsinger, who rejoined Intel after serving as CEO of VMware for eight years, outlined the company’s path forward to manufacture, design and deliver leadership products and create long-term value for stakeholders.
During the company’s global “Intel Unleashed: Engineering the Future” webcast, Gelsinger shared his vision for “IDM 2.0”, an evolution of Intel’s integrated device manufacturing (IDM) model.
Gelsinger was the architect of the original Intel 80486 processor, introduced in 1989. In September 2009, he left Intel to join EMC.
Intel announced the appointment of Gelsinger as its new CEO on 13 January, effective 15 February.
Yesterday, Gelsinger announced significant manufacturing expansion plans, starting with an estimated $20 billion investment to build two new factories (or fabs) in Arizona. He also announced Intel’s plans to become a major provider of foundry capacity in the US and Europe to serve customers globally.
According to Reuters, the move by Gelsinger aims to restore Intel’s reputation after manufacturing delays sent shares plunging last year.
It notes the strategy will directly challenge the two other companies in the world that can make the most advanced chips, Taiwan’s Semiconductor Manufacturing and Korea’s Samsung Electronics.
According to Statista, in the fourth quarter of 2020, 61.4% of x86 computer processor or CPU tests recorded were from Intel processors, a fall from the 64.9% share seen in previous quarters, while 38.6% were from AMD processors. When looking solely at laptop CPUs, Intel is the clear winner, accounting for 80% of laptop CPU test benchmark results in the fourth quarter of 2020, says Statista.
“We are setting a course for a new era of innovation and product leadership at Intel,” said Gelsinger. “Intel is the only company with the depth and breadth of software, silicon and platforms, packaging and process which at-scale manufacturing customers can depend on for their next-generation innovations.
“IDM 2.0 is an elegant strategy that only Intel can deliver – and it’s a winning formula. We will use it to design the best products and manufacture them in the best way possible for every category we compete in.”
To accelerate Intel’s IDM 2.0 strategy, Gelsinger announced a significant expansion of Intel’s manufacturing capacity, beginning with plans for two new fabs in Arizona, located at the company’s Ocotillo campus.
The chipmaker says these fabs will support the increasing requirements of Intel’s current products and customers, as well as provide committed capacity for foundry customers.
This build-out represents an investment of approximately $20 billion, which is expected to create over 3 000 permanent high-tech, high-wage jobs; over 3 000 construction jobs; and approximately 15 000 local long-term jobs.
Arizona governor Doug Ducey and US secretary of commerce Gina Raimondo yesterday participated with Intel executives in the announcement.
Gelsinger commented: “We are excited to be partnering with the state of Arizona and the Biden administration on incentives that spur this type of domestic investment.”
Intel expects to accelerate capital investments beyond Arizona, and Gelsinger said he plans to announce the next phase of capacity expansions in the US, Europe and other global locations within the year.
The firm plans to engage the technology ecosystem and industry partners to deliver on its IDM 2.0 vision.
To that end, Intel and IBM announced plans for a research collaboration focused on creating next-generation logic and packaging technologies.
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