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Semiconductor giant Intel will invest more than $20 billion to build two new chip-making plants near Columbus, Ohio, the company has announced, with the possible investment growing to $100 billion and eight plants over the next ten years.
Separately, the company will spend as much as $100 million with educational institutions in the Columbus area to strengthen research programs and prepare a workforce for the plants.
The investment follows Intel’s $100 billion in investment plans revealed in 2021 and is part of the chip industry’s need to radically expand its manufacturing capacity to meet a ravenous global appetite for electronic devices.
We have detailed the worldwide shortage of computer chips and its impact in such stories as “Global Chip Shortage to Cost Auto Makers $210 Billion This Year” (5 Oct 2021), “Global Chip Shortage Slashes Economic Outlook” (2 Nov 2021) and “Semiconductor Stocks Riding High on Chip Shortage” (23 Nov 2021).
This century, computer chip manufacturing has migrated to lower-cost countries, leaving developed economies vulnerable to the kinds of supply disruptions the COVID War exposed.
The virus “shined a spotlight on the fragility in the global semiconductor supply chain,” Gelsinger said.
Although the global chip shortage will ease in the next few months, it will persist through this year and perhaps next as well, Intel CEO Pat Gelsinger told The Wall Street Journal.
Ohio has granted Intel’s project tax breaks tied to job creation and infrastructure spending, including plant construction, lieutenant governor Joh Husted said in comments cited by the WSJ.
In return, Intel will add an estimated $2.8 billion to the state’s yearly bottom line, according to state estimates.
To ensure self-sustaining domestic chip-making industries, the U.S. and Europe are putting together subsidy programs.
The U.S. Senate has passed a $52-billion measure to support chip research and production. The measure has not yet been taken up in the House of Representatives.
President Joe Biden, whose Build Back Better plan allotted $150 million to the chip industry, praised Intel’s Ohio expansion.
TREND FORECAST: Intel’s massive Ohio project is a reflection of our Top 2022 Trend of self-sufficiency in nations, businesses, and households. Automakers are already taking steps to shore up future chip supplies by forming alliances with chip makers, as we showed in “Will Auto Alliances Protect Chip Supply?” (23 Nov 2021).
The trend toward self-sufficiency will see companies and countries cultivating not only domestic chip supplies, but also homegrown capabilities across a range of critical industries, such as steel-making and electronics manufacturing.
This, in turn, will place an even greater emphasis on automation to cut costs and streamline production, as we explained in “Virus Speeds Automation: Bye Bye Workers” (21 Sep 2021).
As we noted in that article, automation’s current acceleration as part of the trend to self-sufficiency bears out our Trend Forecast made 1 December, 2016: Virtually every industry will be significantly impacted or transformed by the expanding capability and affordability of robot and intelligent automation. Innovations will sweep across virtually every sector of commerce, business, jobs, and professions.