Intel has endeavored to downsize the circuitry to make processors competitive and profitable.
Stephen Shankland / CNET
Intel plans on Monday to announce a $ 3.5 billion investment to upgrade a chip manufacturing facility in Rio Rancho, New Mexico. That spending, combined with $ 20 billion to build two new facilities in Arizona, is part of a huge effort by the chipmaker to rejuvenate its manufacturing.
Intel confirmed the $ 3.5 billion upgrade, first released on Sunday in the 60 minutes by CBS. Intel manufacturing chief Keyvan Esfarjani plans to detail the plan at a press conference with New Mexico Governor Michelle Lujan Grisham, the two New Mexico Senators Martin Heinrich and Ben Ray Luján, and Congresswoman Teresa Leger Fernandez, Intel.
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Intel is pleased with the current efforts to raise federal funds to help the US chip industry. Gelsinger said Intel will also invest more of its own money instead of spending it buying its own stock – a move that makes shareholders happy but does not support research or operations.
“In the future, we will no longer concentrate as much on buybacks as we did in the past,” said Gelsinger to 60 Minuten. “That was checked as part of my entry into the company and agreed with the board of directors.”
Intel spearheaded advances in chip manufacturing for decades, but has lagged behind Taiwan Semiconductor Manufacturing Co. (TSMC) in recent years. The investment in the new chip manufacturing facilities, called fabs, is part of Intel’s great effort to restore its competitiveness under its new managing director, Pat Gelsinger. There are also plans to build chips for others, a company called Foundry, and rely on other chip foundries to build some of its own chips.
The Silicon Valley company is still profitable, but faces tough competition on several fronts alongside TSMC and the third major chip manufacturer, Samsung. All smartphone processors belong to the Arm family, including Apple’s A series. Apple has also split up with Intel with its new M-series Mac processors. Amazon also has an arm server processor for its Amazon Web Services, the cloud computing foundation that powers huge chunks of the Internet.
Intel is also facing a smaller arm rival called RISC-V, which has piqued the interest of some well-known chip startups. One, Tenstorrent, hired Jim Keller, formerly a top-class Intel chip designer, as managing director. Another company, Esperanto Technologies, has introduced an AI chip design with more than 1,000 processor cores.
TSMC is also spending billions of dollars on its new factories, mostly in Taiwan but also in Arizona. However, Gelsinger is optimistic: “We believe that it will take us a few years and that we will be caught up,” he said 60 minutes.