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Intel is Spending 20B to Build 2 new Chip Plants in Arizona

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Intel announced on Tuesday that it will spend 20 billion to build two new chip factories, called fabs, in Ocotillo, Arizona. Intel stock rose as much as 5 on the news in extended trading on Tuesday. The announcement, coinciding with new CEO Pat Gelsingers first public remarks since taking over the job, signals that Intel will continue to focus on manufacturing during industry shifts that have led competitors to increasingly separate chip design and chip fabrication. The news comes during a global chip shortage that is snarling industries from automobiles to electronics and worries the U.S. is falling behind in semiconductor manufacturing.

Intel also said that it will act as a foundry, or a manufacturing partner, for other chip companies that focus on semiconductor design but need a company to actually make the chips. Intel said its foundry subsidiary will be called Intel Foundry Services and will be led by Randhir Thakur, a current Intel senior vice president. Gelsinger said the foundry business will compete in a market potentially worth 100 billion by 2025 and will manufacture a range of chips, including chips based on ARM technology, which are used in mobile devices, and has historically competed with Intels favored x86 technology.

Intel currently operates four factories, called wafer fabs, in the United States. In addition to its site in Arizona, which is being expanded, it also has fabs in Massachusetts, New Mexico and Oregon. It also makes chips in Ireland, Israel…

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