Trump touts new jobs as Intel resurrects Arizona chip factory

Intel's mothballed Fab 42 is back in business to make next-gen chips. CEO Brian Krzanich uses it to endorse White House efforts to boost US manufacturing.

Intel CEO Brian Krzanich, left, stands next to President Donald Trump to announce a next-generation chip factory.

CBS News

Intel chip factories come and go, but one planned for Arizona has assumed new political importance amid President Donald Trump's attempt to enliven US manufacturing.

Intel Chief Executive Brian Krzanich stood by Trump in the White House on Wednesday to announce a plan to resuscitate an Arizona chip factory called Fab 42, boasting of the company's manufacturing prowess and criticizing US regulations. His proximity contrasts with many tech companies' displeasure with the new administration.

"Intel is very proud of the fact that the majority of our manufacturing is here in the US and the majority of our research and development is here in the US, while over 80 percent of what we sell is sold outside of the US," Krzanich said. "We've been able to do that even while the regulatory and tax policies have disadvantaged us in the past relative to the competition we've had across the world."

Trump tweeted his pleasure at Intel's move: "Thank you Brian Krzanich, CEO of @Intel. A great investment ($7 BILLION) in American INNOVATION and JOBS! #AmericaFirst"

Although Intel capitalized on the administration's priorities as a way to publicize the factory, that had nothing to do with the company's actual decision. "We're thrilled to have the recognition for the investment and to be able to show people we're investing in the future of innovation in the US, but it wasn't tied to any specific policy or anything the administration did," Intel spokesman William Moss said. "It's driven because we anticipate demand for the factory along the time frame it'll take us to complete."

Intel no doubt would like more favorable regulations in the US, but tight ties with Trump can come with a cost. Uber CEO Travis Kalanick resigned from a Trump economic advisory council after customers uninstalled his company's ride-hailing app en masse in part to protest Uber's cooperation. Elon Musk, CEO of electric carmaker Tesla, hasn't resigned despite similar pushback, but he's also offered some resistance to the Trump administration's fondness for fossil fuels. For example, a tweet Wednesday from Musk pointed toward a Wall Street Journal op-ed seeking a carbon tax to cut greenhouse gas emissions.

Intel's investment reawakens an old plant. The company announced Fab 42 in 2011 as part of a $5 billion investment plan that would mean 1,000 new jobs, but mothballed it in 2014 because of slumping chip demand. Now it's back on with a $7 billion plan that will mean 3,000 jobs in three or four years, Intel said.

Intel announced Fab 42 in Chandler, Ariz., in 2011, mothballed it in 2014 and is now set to begin manufacturing chips there in 2020 or 2021.

Intel

At the White House, Krzanich echoed Trump's speaking style to boast of the plan. "This factory will produce the most powerful computer chips on the planet, powering the best computers, the best data centers, autonomous cars -- the most powerful computing devices on the planet," he said.

In an email to employees, he also lent his backing to Trump administration policy. "We support the administration's policies to level the global playing field and make US manufacturing competitive worldwide through new regulatory standards and investment policies," he said.

But Intel has also joined Google, Facebook, Apple, Microsoft and dozens of other tech companies that objected to Trump's immigration ban.

"When we disagree, we don't walk away," Krzanich said in his email. "We believe that we must be part of the conversation to voice our views on key issues such as immigration, H-1B visas and other policies that are essential to innovation."

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First published Feb. 8, 12:22 p.m. PT.
Update, 5:00 p.m. PT: Adds comment from Intel about the timing of the announcement and administration's involvement in the decision.

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