Intel breaks ground on 2 Arizona chip plants worth $20B

Intel breaks ground on 2 Arizona chip plants worth $20B

Phil Puccio

Dive Brief:

  • Intel is expanding its presence in Arizona through the construction of two new semiconductor factories worth $20 billion, according to an Intel press release.
  • Expected to be fully operational in 2024, the facilities will employ 3,000 Intel employees, 3,000 construction jobs, and support an estimated 15,000 additional indirect jobs in the local community, according to the release.
  • Intel’s plans for the semiconductor fabricator factories (also known as “fabs”) have support from government officials, such as Arizona Gov. Doug Ducey, who said that the groundbreaking “ushers in a new landscape for Arizona semiconductor production,”¬†according to the release.

Dive Insight:

Amid a semiconductor shortage, supply chain issues and a 26-year-long drought, Intel broke ground on its two new factories worth $20 billion on Sept. 24 on its Ocotillo campus in Chandler, Arizona.

The expansions, officially announced on March 23, are meant to step into the semiconductor manufacturing market domestically, in response to severely stagnated supply chain issues domestically and abroad, along with a shortage of semiconductors that are impacting automakers and other industries.

The investment also comes as the Senate passed the United States Innovation and Competition Act (USICA) last June, which would provide $52 billion towards domestic semiconductor research and production, which the Semiconductor Industry Association lobbied for.

The project will be 670,000 square feet, and will bring the total number of semiconductor fabricator factories to six on the campus, according to Fox10 Phoenix. Dominic Greensmith, director of construction at Intel, told Fox10 Phoenix that the new facility would be three times larger than the old facility, once expansion is completed.

The two facilities will be further extensions of Intel’s relationship with Arizona, where it has had a campus in Chandler since 1980, and in Arizona overall since 1979. The Arizona site is Intel’s second largest overall, and Intel counts itself as the largest employer in Chandler, according to the company website.

However, despite Intel’s history, it’s not the only company in the semiconductor business in Arizona. In March, the Taiwan Semiconductor Manufacturing Co. announced it was building a $12 billion, 3.8 million square foot manufacturing complex in Phoenix. This factory is also on track to open in 2024.

Another key issue is the drought that Arizona has been experiencing for the last 26 years. Semiconductor fabs, according to The Verge, are incredibly water intensive. Factories can use between 2 million and 4 million gallons of water per day, or the equivalent of between 13,698 to 27,397 Arizona residents daily water usage. 

Intel has prided itself on its goal of reaching net positive water usage by 2030. In 2020, the Arizona site returned and restored approximately 95% of the freshwater used in manufacturing to the community and local watersheds, according to the release.

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