Intel plans $20 billion chip manufacturing site in Ohio - sources

© Reuters. FILE PHOTO: The Intel Corporation logo is seen on a display in a store in Manhattan, New York City, November 24, 2021. REUTERS/Andrew Kelly

By David Shepardson and Jane Lanhee Lee

WASHINGTON/SAN FRANCISCO (Reuters) - Intel Corp (NASDAQ:INTC) on Friday is set to announce it will invest $20 billion in a massive new manufacturing site near Columbus, Ohio to develop and manufacture advanced semiconductor chips, sources briefed on the matter told Reuters.

The planned investment includes 3,000 permanent jobs on the 1,000-acre site in New Albany, Ohio. Time magazine, which first reported the news, said Intel will build at least two semiconductor fabrication plants.

President Joe Biden is making remarks Friday on the U.S. government's efforts "to increase the supply of semiconductors, make more in America, and rebuild our supply chains here at home," the White House said earlier.

Intel Chief Executive Pat Gelsinger is set to appear with Biden on Friday at the White House, sources told Reuters. The White House did not respond to a request for comment.

The initial $20 billion is the first step of what could be an eight-factory complex costing tens of billions of dollars.

Intel declined to comment on its plans but said in a statement that Gelsinger would disclose details Friday of "Intel’s latest plans for investment in manufacturing leadership" as it works "to meet the surging demand for advanced semiconductors."

Chipmakers are scrambling to boost output after manufacturers around the world, from autos to consumer electronics, faced shortages of chips. Intel also is trying to win back its position as maker of the smallest and fastest chips from current leader TSMC, which is based in Taiwan.

Gelsinger last fall also said he planned to announce another U.S. campus site before the end of the year that would eventually hold eight chip factories.

He told the Washington Post the complex could cost $100 billion over a decade and eventually employ 10,000.

Gelsinger is driving Intel plans to expand, especially in Europe and the United States, as it seeks to heat up competition with global rivals and respond to a worldwide microchip shortage.

Intel and Italy are intensifying talks over investments expected to be worth around 8 billion euros ($9 billion) to build an advanced semiconductor packaging plant, Reuters reported late last year.

The Biden administration is making a big push to convince Congress to approve $52 billion in funding to dramatically increase chip production in the United States. The Senate in June voted 68-32 for the chips funding as part of a broader competitiveness bill, but it has been stalled in the House.

House Speaker Nancy Pelosi said Thursday she hopes to "go to conference" on the chips funding measure soon.

Still, Intel's plans for new factories will not alleviate the current demand crunch, because such complexes take years to build. Gelsinger previously said he expected the chip shortages to last into 2023.

In September, Intel broke ground on two factories in Arizona as part of its turnaround plan to become a major manufacturer of chips for outside customers. The $20 billion plants will bring the total number of Intel factories at its campus in the Phoenix suburb of Chandler to six.

Intel told Time it considered 38 sites before picking New Albany, Ohio in December. Ohio has agreed to invest $1 billion in infrastructure improvements to facilitate the factory, Time said.

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