Intel to invest $20 billion in new chip-making facility in Ohio

Intel Corp. plans to invest at least $20 billion in new chip-making capacity in Ohio, bolstering the company's semiconductor production ambitions as more demand for digital products and a global chip shortage have boosted the need for more manufacturing, according to a person familiar with the matter.

The facility would be built near Columbus, Ohio, according to the person. It would add to Intel's effort to expand its chip-making business, which has seen the company make more than $100 billion in investment pledges over the past year.

For Intel Chief Executive Pat Gelsinger, the move is the latest step in his quest to revive the company's fortunes by restoring its position as a cutting edge chip designer and becoming a leading chip manufacturer, including for other companies. In 2020, graphics chip maker Nvidia Corp. overtook Intel as the U.S. s most valuable semiconductor company. In the past year, Samsung Electronics Co. overtook Intel as the biggest chip maker by quarterly revenue. The South Korean company is expected to hold onto that position when both report earnings next week, according to analysts.

Intel planned big investments in chip-making in Arizona and New Mexico and a $95 billion commitment to European manufacturing last year.

The person familiar with the plan said that the Intel facility is expected to create 3,000 permanent jobs at the new Ohio site. Time magazine reported earlier on Intel's Ohio investment.

The chip drought and government willingness to give subsidies to land semiconductor production plants has triggered an investment spree among companies, which has resulted in strong demand that industry officials expect to continue. In the next three years, Samsung said it would spend more than $205 billion over the next three years, with chip-making priority, and unveiled a $17 billion investment in Taylor, Texas. Taiwan Semiconductor Manufacturing Co., the world's biggest contract chip maker, has said it will spend $100 billion over the next three years to increase production capacity. Other chip companies, such as Micron Technology Inc. and Texas Instruments Inc., have detailed fresh investment plans.

Car makers have been unable to produce any products due to the chip shortage, which has resulted in higher prices on some electronics. PC makers have enjoyed strong demand for their devices, but shortages of some components have weighed on shipments.

The chip shortage should be fixed this year, although supply gaps could persist into 2023, Gelsinger said.

The US and European governments are designing massive subsidy packages to reduce the risk of future supply-chain disruptions on their domestic industries. Congress is working to pass legislation to support chip-company investments in the U.S.

The legislation needs to make its way through the House, as the U.S. Senate approved $52 billion in funding last year to support semiconductor research and production.