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Intel to spend billions on new fab, plant upgrades

It'll put between $6 billion and $8 billion toward building a fab in Oregon and upgrading four other U.S. manufacturing plants as it shifts toward 22-nanometer designs.

Intel is pledging to spend between $6 billion and $8 billion to build a new chip manufacturing plant and upgrade its existing fabrication plants in Arizona and Oregon.

The influx of cash will allow Intel's new and current fab plants to put more muscle behind building the chipmaker's next-generation, 22-nanometer microprocessors, which could eventually power sleeker devices that deliver higher performance and longer battery life at a cheaper cost.

Intel's first microprocessors built on the 22-nanometer process, codenamed "Ivy Bridge," will be in production in late 2011, the chipmaker said today.

Besides kicking in money into its U.S. facilities, which account for three-quarters of Intel's global manufacturing plants, the investment will create 6,000 to 8,000 construction jobs and lead to 800 to 1,000 new permanent high-tech jobs and help retain workers at the current plants.

"Today's announcement reflects the next tranche of the continued advancement of Moore's Law and a further commitment to invest in the future of Intel and America," Intel President and CEO Paul Otellini said in a statement. "The most immediate impact of our multi-billion-dollar investment will be the thousands of jobs associated with building a new fab and upgrading four others, and the high-wage, high-tech manufacturing jobs that follow."

The new fab plant in Oregon, dubbed "D1X," is scheduled to start up its research and development in 2013. The plants due to be upgraded include two in Arizona, known as Fab 12 and Fab 32, and two in Oregon, named D1C and D1D.

The new and upgraded fab plants will help Intel keep pace with the increasing demand for microchips. At an investor's meeting in May, Otellini revealed that more than 1 million PCs are shipping every day, a number expected to double in just four years.

But demand is also surging for mobile and embedded devices, which touch a range of products from smartphones to tablets to smart TVs. Those are areas where Intel is competing for a larger piece of the pie, requiring the need for smaller and smaller processors. In another five years, Intel is shooting to ship a billion chips per year to power the huge number of devices across the various markets.

The 22-nanometer chips, to be built at the new and upgraded plants, were first shown off by Otellini at the Intel Developers Forum a little more than a year ago. Intel's demo of the chip technology followed initiatives by IBM and AMD to be the first to push the tiny microprocessor designs to the market. Storing 2.9 billion individual transistors in an area the size of a fingernail, the 22-nanometer chip has posed some manufacturing challenges regarding the use of conventional photolithography, the method by which circuits are printed onto semiconductor chips.

The new project also follows a $7 billion investment by Intel in early 2009 to upgrade its manufacturing processes in the U.S. That money helped boost production of the company's 32-nanometer chips, which are used in an array of PCs, servers, and mobile devices, and are currently the smallest chips being assembled.

Otellini has complained in the past that government policies have made it difficult to spend the money to build new plants in the U.S. and has called on Washington to offer more incentives to help the tech industry provide for domestic jobs.