Intel wants to add a Licking County factory ‘every year or two,’ CEO says

Intel expects to open a new factory “every year or two” in its $100 billion plan to turn Licking County into one of the world’s biggest semiconductor operations, the company’s CEO told Ohio business leaders on Thursday.

But the project’s full buildout is dependent on Congress enacting the $52 billion aid package for the industry that Intel CEO Pat Gelsinger says is a must if semiconductor companies are going to manufacture more computer chips in the U.S.

“We would just keep adding fab modules one every year or two over the next decade until we have the full eight to 10 fab modules,” Gelsinger told CEOS and other business leaders at an Ohio Business Roundtable summit at Ohiohealth’s Columbus headquarters.

“That’s how we get to $100 billion.”

Intel has committed to investing $20 billion to build two factories, also called fabs, on nearly 1,000 acres that has been annexed into New Albany, the company’s first new manufacturing site in 40 years.

The company has said it will hire 3,000 workers earning an average of $135,000 per year.

Construction is slated to start this year with the first chips being produced in 2025, the company has said.

“It isn’t just that we have an agenda to build in Ohio. We have an agenda to rebuild the entire U.S. semiconductor manufacturing sector,” said Gelsinger, who addressed the group over video.

The U.S. House and Senate have passed different versions of what has been dubbed the CHIPS Act, which would provide $52 billion in aid to the semiconductor business, but the two sides have been slow to reconcile differences on the legislation and get it to President Biden.

Both sides were set to meet Thursday to start working out differences.

Getting that passed is the top priority for a rapid expansion of the Ohio site, Gelsinger said, “so that it is economically viable for us to build and compete globally to have these factories ... on U.S. soil.”

He urged those in attendance to push their Congressional leaders to get the legislation passed quickly.

Asian countries have, on average, a 30% to 40% cost advantage over the U.S. because of lower building, labor and environmental standards and other factors, Gelsinger said.

Gelsinger also says Intel will need continued support from Ohio, which has committed $2 billion in incentives, which he said is necessary to attract workers and restore the industry to the country.

“The thing about a megasite like this, it isn’t just our employees,” he said.

Continued buildout of the site would require about 5,000 construction workers over the next decade, he said.

The site will be a magnet for other tech companies as has happened to Intel’s operations in Arizona and Oregon, he said.

“Part of our agenda is to move rapidly,” Gelsinger said. “The semiconductor shortage in the world is not abating.”

Vishal Soin, president of Soin International in Dayton, told Gelsinger and the audience of more than 200 people that Intel’s announcement was seen by some as benefiting Greater Columbus,

but not necessarily the state.

“When the announcement came, the reaction from the state was a bit mixed,” he said as he asked Gelsinger about how the entire state will benefit.

“As we get this spark underway in Licking County, I certainly hope projects emerge across the region,” Gelsinger said, without saying if he meant other parts of Ohio or neighboring states.

U.S. production of the world’s semiconductors has fallen from 37% in 1990 to 12% today, according to an industry report.

“All of a sudden, we’re waking up and saying, ‘Oh my God. What’s going on? How did we let that happen?’” Gelsinger said.

Bringing back production of semiconductors in the U.S. along with other industries can help change that, he said.

“This is a unique moment in history for our supply, for our manufacturing to be re-established on American soil . ... I think this is a moment in history that if seized well will set an arc for investment (and the) manufacturing supply chain that will literally last for decades.”