INTEL SLOWS $200 BILLION INVESTMENTS

Intel has been finding it hard to speed up the development of new facilities due to more bureaucracy than originally expected. Intel is expected to comment on the developments in early 2022. There is more to building a facility then firing up an earth mover, pouring some concrete and assemble the building.

This year Intel broke ground on two new semiconductor production facilities — Fab 52 and Fab 62 — at its Ocotillo camp near Chandler, Arizona. These fabs will cost around $20 billion and enhance the production capacity of an already existing site. But building additional fabs on a well-established site and establishing a brand-new site are two very different things.

It costs a lot more to start a new site from scratch. Intel suggested it can cost anywhere from $60 to $120 billion to build a new city size complex with perhaps 6 to 8 lines.

Planning fab sites that will require $100 billion in funding over a decade is complex. Intel needs to build its new manufacturing facilities on land with access to communications and talent, which essentially means proximity to big cities. Furthermore, Intel is looking forward to getting subsidies and incentives from federal and local governments over many years, and fab modules and persuading authorities is hard.  So realistically the new fabs in Arizona are already under construction so they should be ready in 18-24 months.

Over in India the government is seeking to have a foundry complex built in the nation. India has already approved a US$10 billion incentive plan for semiconductor, as well as display panel manufacturers who are willing to consider India as the next location for their new fabs. The Indian government is hoping that the investments will create some 35,000 direct jobs for highly qualified staff, plus up to another 100,000 indirect jobs. India is lagging behind when it comes to the semiconductor industry, despite there being a growing local semiconductor designs, most of them can’t be produced locally due to lack of suitable foundry partners.

Given the wafer shortages it may be until 2024 before consumers see changes in supplies of hardware. Logic is seen in everyday products which is why more lines are being build. It simply takes 18-24 months to build a new line in an existing campus. In a new campus it can take 24-36 months.