Mar 24, 2021 - Economy & Business

Intel commits $20B for new Arizona chip plants

Picture of Pat Gelsinger

Pat Gelsinger. Photo: Patrick T. Fallon/Bloomberg via Getty Images

Pat Gelsinger, who recently returned to Intel as CEO, announced Tuesday that the company will invest $20 billion to build two new chip manufacturing plants in Arizona.

Why it matters: The move comes amid a global chip shortage and as Intel is facing production problems that have hampered its ability to move to the latest generation of its semiconductors.

The big picture: Intel is one of the few chip companies that still builds and runs its own manufacturing lines. Most other chip firms only design their semiconductors and rely on companies like Taiwan Semiconductor Manufacturing or Samsung to do the actual manufacturing.

Between the lines: In recent years, Intel has struggled to keep up with manufacturing rivals. Those troubles have forced the company to make some of its chips through other producers and raised questions about Intel's commitment to continuing to run its own manufacturing plants, known as fabs.

  • Instead, Intel said Tuesday it will look to increase the amount of business it does making chips for other companies, an effort aimed at making its increased investment in manufacturing pay off.
  • It's also formed a partnership with IBM to advance the U.S. semiconductor industry more broadly.
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