Friday, February 3

Intel to invest $20 million in a chip factory in Ohio

One of the great concerns of the US government has been the skip chips and how the manufacture of these components outside their country has been a catalyst that has further aggravated the situation. Thus, Intel stated that it will invest 20 million dollars in a chip factory in Ohio, near Columbus. In addition, it will generate around 3,000 jobs according Meghan Brobowsky en The Wall Street Journal.

This would add to Intel’s effort to expand its chip manufacturing business that has seen the company with more than $100 billion in investment commitments During the past year.

The White House said earlier Friday that Intel’s investment plan boosted US efforts to strengthen domestic chip manufacturing. Governments, particularly in the US and Europe, have been concerned about secure your supply of semiconductors after years in which manufacturing has gravitated toward lower-cost Asian countries. The chip drought during the pandemic has only amplified those concerns.

“The Covid-19 pandemic has highlighted the fragility of the global semiconductor supply chain,” the White House said.

For him Intel CEO Pat GelsingerThe move is the latest step in its bid to revive the company’s fortunes by restoring its position as a cutting-edge chip designer and becoming a leading chipmaker, even for other companies. In 2020, the graphics chip manufacturer Nvidia surpassed Intel as the most valuable semiconductor company in the US. Samsung Electronics last year it overtook Intel as the world’s largest chipmaker by quarterly revenue. Analysts expect the South Korean company to maintain that position when both report earnings next week.

Last year, Intel said it planned large investments in the chip manufacturing in Arizona and New Mexico and a commitment of approximately $95 billion for European manufacturing.

What has the competition done to deal with the drought?

A combination of strong demand that industry officials expect to persist, a chip drought and governments willing to offer subsidies to set up semiconductor production plants has triggered a investment wave between companies. Last year, Samsung said he would spend more than 205 billion dollars in the next three years, with chip manufacturing as a priority, and revealed an investment of $17 billion in Taylor, Texas. Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, has said it would spend a record $100 billion over the next three years to increase production capacity. Other chip companies, such as memory chip maker Micron Technology y Texas Instruments , have also detailed new investment plans.

Companies are reacting to the chip shortage, which has caused automakers shut down plants and caused higher prices in some electronic products. The PC manufacturers they have enjoyed strong demand for their devices, but shortages of some components have affected shipments.

“Chip shortages should start to improve this year, although supply gaps could persist into 2023,” Gelsinger said.

What have the governments done?

To ground chip plants and reduce the risk of future supply chain disruptions in their domestic industries, the US and European governments are devising massive subsidy packages. Congress has been working to pass legislation that supports investments of chip companies in the US.

Last year, the US Senate approved $52 billion in funding to support semiconductor research and production, though the legislation still needs to pass the House.

President Biden, eager to show that he is working to promote domestic chip production, was scheduled to highlight the news later on Friday. The White House is facing political pressure over supply chain issues and inflation.

The White House, citing industry data, said that since early last year, chip companies have announced nearly 80 billion dollars in new investments in the US that should be developed until 2025.

Intel closed Thursday’s session at $52.04 and Ei indicators are mixed.