Intel to spend $3.5B upgrading New Mexico fab, boosting US chipmaking

Intel to spend $3.5B upgrading New Mexico fab, boosting US chipmaking
Intel's 10nm Ice Lake Processor

Intel has struggled to shrink circuitry, key to making the processor competitive and profitable.

Stephen Shankland / CNET

Intel on Monday announced a $ 3.5 billion investment to upgrade the Rio Rancho, New Mexico, chip manufacturing plant. The spending, combined with $ 20 billion to build two new facilities in Arizona, is part of a major effort by the chipmaker to rejuvenate its construction.

Intel confirmed the $ 3.5 billion upgrade, first reported on Sunday on CBS ’60 Minutes. Intel’s construction chief Kievan Esfarjani planned to expand the scheme in a press conference with the New Mexico government. Michelle Lujan Grisham, two senators from New Mexico, Martin Heinrich and Ben Ray Lujan, and Rep. Teresa Badger Fernandez, intel said.

Intel is pleased with the current efforts to raise federal funds to help the American chip industry. Gelsinger said Intel would also invest more of its own money, rather than spend it on buying its own stock – a move that keeps shareholders happy but doesn’t help with research or operations.

“We won’t be anywhere near as the focus is on buybacks as we have in the past,” reported in 60 minutes. “It has been reviewed as part of my arrival in the company, agreed with the board of directors.”

Intel pioneered chipmaking for decades but lagged behind Taiwan Semiconductor Manufacturing Company (TSMC) in recent years. Investing in its new chipmaking plants, called Fabs, is part of a major Intel effort to restore competition under its new chief executive, Pat Jellinger. It also plans to make chips for others, a business called a foundry, and to rely on other chip foundries to make some of its own chips.

The Silicon Valley company remains profitable, but it faces stiff competition on several fronts in addition to TSMC and the third major chipmaker, Samsung. All smartphone processors are members of the Arm family, including Apple’s A series. Apple has also partnered with Intel with its new M series of Mac processors. Amazon also has an arm server processor for its Amazon web services, a cloud computing foundation that powers the Internet’s vast swats.

Intel also faced a small arm rival named RISC-V that has won interest from some notable chip startups. One, Tenstorent, hired Jim Keller, formerly a high-profile Intel chip designer, as chief executive. Another, Esperanto Technologies has revealed an AI chip design with over 1,000 processing cores.

TSMC is spending billions of dollars on its new fabs, mostly in Taiwan but in Arizona. Even though we have got 60 minutes, we say, “However, we say that” it is assumed that “it will take us a few years.”

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