CHANDLER, Ariz. - California-based Intel Corporation will expand its Arizona-based manufacturing capacity by building two factories in the state and outsource more of its production as the new CEO looks to turnaround the struggling chipmaker.
The expansion will cost about $20 billion and create 3,000 high-tech, high-wage jobs and 3,000 construction jobs.
"We chose Arizona for this new $20 billion investment, because Arizona is the largest U.S. manufacture site that is supported by strong ecosystems of innovation and our deep ties to this community," said an Intel official.
"It also proves once again that Arizona is at the cutting-edge of advanced chipmaking and manufacturing. No company has been such an instrumental partner in Arizona’s growth and transformation over the years as Intel, and my sincere thanks goes out to CEO Pat Gelsinger and the entire Intel team. I also want to recognize the U.S. Department of Commerce, Arizona Commerce Authority, City of Chandler, President Fann and Speaker Bowers for their partnership to bring this project here. Today, when people think of semiconductor production, they think of Arizona, and that means tremendous things for our state, country and future generations of Arizonans," said Ducey.
More construction in the United States, Europe and elsewhere could be announced over the next year, said Gelsinger in a video outlining his vision for the company’s transformation.
"To make our new expansion in Arizona possible, we are excited to be partnering with the state of Arizona and the Biden Administration on incentives that spur this type of domestic investment," added Gelsinger.
"Today’s announcement by Intel is proof that our legislation investing in semiconductor manufacturing helps grow Arizona’s economy, creates good-paying jobs across our state, helps enhance our national security, and ensures our country continues to lead in innovation. I am proud our success getting the CHIPS for America Act signed into law helped pave the way for today’s expansion, and I remain committed to continuing bipartisan work boosting Arizona’s economy," stated Sen. Kyrsten Sinema.
"The unprecedented demand for technology has created even more need for the innovative products Intel creates," Keyvan Esfarjani, Intel’s senior vice president of manufacturing and operations, told reporters outside the company’s plant in Chandler, Arizona.
Intel dominated chipmaking for decades, but has stumbled lately with delays in its development of a next-generation chip-making process already in use by a major Taiwan supplier, TSMC. It has struggled to adapt to the shift from personal computers to mobile devices since Apple released its game-changing iPhone more than a decade ago. Although the company has remained profitable, its heyday during the PC era was long ago.
Intel weathered another blow last year when Apple, also based in California, announced it would rely on its own chips to power its Mac computers instead of Intel’s.
Arizona Gov. Doug Ducey called Intel’s growth plan the largest private-sector investment in state history and a victory for U.S. manufacturing.
Taiwan Semiconductor Manufacturing Company is also planning a large factory in North Phoenix.
Intel has a history of making splashy announcements that don’t immediately pan out. A decade ago, the company announced plans to build a new multibillion-dollar factory in Chandler while President Barack Obama visited Intel’s plant in Hillsboro, Oregon. That facility, known as Fab 42, was put on ice for years, was announced again alongside President Donald Trump in 2017 and finally opened late last year.
The company, which earned nearly $21 billion last year on revenue of $78 billion, is eligible for up to $90 million in state tax credits if it fulfils the job and investment commitments it made Tuesday, said Sandra Watson, head of the Arizona Commerce Authority, the state’s economic development agency. State lawmakers on Monday rushed through legislation to more than double the funding available for the program, which Ducey signed into law hours before Intel’s announcement.
Intel began operations in Arizona in 1980, when it established its facility in West Chandler. It later expanded to a second campus several miles away in the sprawling suburb’s Ocotillo region.
With the expansion, Intel will employ nearly 16,000 people in Arizona.
The governor's office stated, "With a global shortage of semiconductor chips, Arizona is poised to continue growing its technology and advanced manufacturing footprint. Arizona is already a top-five state for semiconductor production, with multiple industry leaders choosing the state to start, expand or relocate operations."
The Associated Press contributed to this report.