Obama to visit Intel plant, in nod to domestic manufacturing

President Obama will visit Intel's Arizona plant on Wednesday in a nod to Intel's abiding U.S. manufacturing presence.

On Wednesday, following his State of the Union address Tuesday night, Obama will travel to Phoenix to deliver remarks at Intel's Ocotillo campus in Chandler, a suburb of Phoenix.

The Arizona plant, designated Fab 42, is under construction now, with completion expected in 2013.

That plant will produce Intel's next generation of processors built on its 14-nanometer technology. To put that into perspective, Intel's upcoming "Ivy Bridge" processors, due in systems this spring, use 22-nanometer technology. Those chips initially went into production last year. So, production of 14-nanometer chips could begin as early as the end of 2013. Generally, the smaller the geometries, the faster and/or more power efficient the processor is.

"For Intel, manufacturing serves as the underpinning for our business and allows us to provide customers and consumers with leading-edge products in high volume," Intel's newly appointed COO, Brian Krzanich, said last year when Obama visited Intel's Oregon manufacturing facility.

Intel said last year that it plans to invest more than $5 billion in the Chandler, Ariz., plant. That announcement was made by Intel CEO Paul Otellini during a visit by Obama to an Intel facility in Hillsboro, Ore.

Despite garnering the lion's share of chip sales from overseas customers, Intel manufactures three-fourths of its microprocessors in the United States. A point not lost on the Obama Administration, which is a strong advocate of domestic manufacturing as a way to create jobs.

Intel's multibillion-dollar plants spawn a satellite of sub-contractors, services, and other businesses that results in a virtuous cycle of job creation. In the case of Arizona, where Intel has other fabs too, it helps create, over time, thousands of jobs, in addition to the jobs at the plant itself. And that is just Arizona. This cycle is more or less duplicated in New Mexico and Oregon too, according to Intel.

But maybe more importantly, it's the kinds of jobs Intel creates. It takes hundreds of highly skilled engineers, scientists, and technical people to run and maintain a chip plant. Just the kind of talent that Obama wants to keep in the U.S.

"Jobs is the real importance of the fab," said Dan Hutcheson, CEO and chairman of VLSI Research. "And Intel's $10 [billion plus] investment last year and this year. Intel and the semiconductor industry in general are one of the few industries investing in U.S. manufacturing. So it's real important to Obama," he said.

Apple, which has come under media scrutiny because it has such a strong overseas manufacturing presence, does use Intel chips in its Macs.

President Obama's State of the Union speech on Tuesday night will focus on "an America built to last" and the four pillars that support this: manufacturing, energy, skills for workers, and American values.

Updated at 12:20 p.m. PST: clarifying expected 14-nanometer chip production schedule.

Updated at 3:40 p.m. PST: adding discussion of manufacturing-related job creation.