Intel announces US$20 billion fab expansion plans in foundry revamp

Rodney Chan, DIGITIMES, Taipei 0

Intel has announced plans to invest about US$20 billion to build two new fabs in Arizona in line with what it calls its IDM 2.0 strategy, seeking to become a major provider of foundry capacity in the US and Europe to serve worldwide customers.

"We are setting a course for a new era of innovation and product leadership at Intel," said Intel CEO Pat Gelsinger in a webcast where he announced the company's IDM 2.0 manufacturing expansion plans.

"Intel is the only company with the depth and breadth of software, silicon and platforms, packaging, and process with at-scale manufacturing customers can depend on for their next-generation innovations. IDM 2.0 is an elegant strategy that only Intel can deliver - and it's a winning formula. We will use it to design the best products and manufacture them in the best way possible for every category we compete in."

To accelerate the IDM 2.0 strategy, Gelsinger said two new fabs will be built in Arizona at at the company's Ocotillo campus. These fabs will support the increasing requirements of Intel's current products and customers, as well as provide committed capacity for foundry customers, he said.

This build-out represents an estimated investment of about US$20 billion, which is expected to create over 3,000 permanent high-tech, high-wage jobs, over 3,000 construction jobs, and approximately 15,000 local long-term jobs, said Gelsinger.

"We are excited to be partnering with the state of Arizona and the Biden administration on incentives that spur this type of domestic investment," he added.

Intel expects to accelerate capital investments beyond Arizona, and Gelsinger said he plans to announce the next phase of capacity expansions in the US, Europe and other global locations within the year.

Gelsinger reaffirmed the company's expectation to continue manufacturing the majority of its products internally. The company's 7nm development is progressing well, driven by increased use of extreme ultraviolet lithography (EUV) in a rearchitected, simplified process flow. Intel expects to tape in the compute tile for its first 7nm client CPU (code-named Meteor Lake) in the second quarter of this year.

According to the CEO, Intel also expects to build on its existing relationships with third-party foundries, which today manufacture a range of Intel technology - from communications and connectivity to graphics and chipsets. Gelsinger said he expects Intel's engagement with third-party foundries to grow and to include manufacturing for a range of modular tiles on advanced process technologies, including products at the core of Intel's computing offerings for both client and data center segments beginning in 2023. This will provide the increased flexibility and scale needed to optimize Intel's roadmaps for cost, performance, schedule and supply, giving the company a unique competitive advantage.

Intel is also looking to build a world-class foundry business, and become a major provider of US- and Europe-based foundry capacity to serve the global demand for semiconductor manufacturing. Intel is establishing a new standalone business unit, Intel Foundry Services (IFS), led by semiconductor industry veteran Randhir Thakur, who will report directly to Gelsinger. IFS will be differentiated from other foundry offerings with a combination of leading-edge process technology and packaging, committed capacity in the US and Europe.