Intel on Monday announced a $ 3.5 billion upgrade to a chip manufacturing plant in Rio Rancho, New Mexico, that will bolster a processor stacking technology called Foveros. The spending, combined with $ 20 billion to build two new facilities in Arizona, are part of a major effort by Intel to rejuvenate its manufacturing.
The chipmaker confirmed the upgrade plan on Sunday, first reported on CBS’s 60 minutes and said Monday that would mean 700 new jobs at the site over the next three years. Intel Chief Manufacturing Officer Keyvan Esfarjani detailed the plan during a press conference with New Mexico Governor Michelle Lujan Grisham, the two New Mexico Senators Martin Heinrich and Ben Ray Luján, and Representative Teresa Leger Fernandez, Intel said. The spending also means 1,000 new construction jobs, with work starting this year.
Intel has led chip manufacturing advancements for decades, but has lagged behind Taiwan Semiconductor Manufacturing Co. in recent years. The investment in its new chip manufacturing plants, called fabs, is part of a major effort by Intel to restore its competitiveness under. The company also plans to make chips for others, a business called a foundry, and rely on other chip foundries to make some of its own chips.
At the New Mexico plant, Intel will increase the use of athat Intel debuted in 2018 and first used in a . Stacking separate chip pieces on top of each other and connecting them with power distribution and communication links is technologically difficult, but Intel expects this to increase manufacturing flexibility. It could also be used to accommodate chip elements made in other chip foundries.
More investment in chipmaking, fewer share buybacks
Intel is pleased with the current political efforts to secure federal funds to help the US chip industry. Gelsinger said Intel will also invest more of its own money, instead of spending it to buy its own stock, which makes shareholders happy but doesn’t help research or operations.
“We won’t be as focused on redemptions in the future as we have been in the past,” Gelsinger told 60 Minutes. “This was reviewed as part of my entry into the company, agreed with the board of directors. “
Appeasing shareholders was important as Intel struggled, Moor Insights and Strategy Analyst Patrick Moorhead tweeted on Monday. “If they hadn’t done a buyout, I think the company would have been broken up,” Moorhead said. One widely suggested remedy for Intel’s problems has been to separate its chip design business, which offers processors such as its Core and Xeon models, from its chip manufacturing business.
Intel’s fierce competition
The Silicon Valley company remains profitable, but faces stiff competition on several fronts in addition to TSMC and the third-largest chipmaker, Samsung. All smartphone processors belong to the Arm family, including Apple’s A series. Apple has also parted ways with Intel for its new M series of Mac processors. Amazon, meanwhile, has an Arm server processor for its Amazon Web Services, the cloud computing base that powers huge swathes of the internet.
Intel is also facing a smaller arm rival called RISC-V which has garnered interest from some notable chip startups. One, Tenstorrent, hired former top Intel chip designer Jim Keller as its general manager. Another, Esperanto Technologies, revealed an AI chip design with more than 1,000 processing cores.
As a sign of the importance that Intel takes seriously in its foundry activities, it will be able to build Arm and RISC-V processors.
TSMC is also spending billions of dollars on its new factories, mainly in Taiwan but also in Arizona. Gelsinger is however optimistic: “We think it will take us a few years and we will be caught up,” he told 60 Minutes.