While large-scale semiconductor factories usually bring up thoughts of the kind of innovation happening in Japan and Taiwan, Ohio residents may soon see millions of semiconductors being made in their own state.
While official plans have not yet been confirmed by the company or federal authorities, several Ohio newspapers reported that the Santa Clara, Calif.-based Intel (INTC) - Get Intel Corporation Report, which forecasts a doubling of the semiconductor market to $1 trillion by 2030, is investing $1 billion to build a semiconductor plant in New Albany, Ohio.
Global Shortage of Chips
A global shortage of semiconductors, or the silicon chip material that goes into everything from cars to digital cameras, has affected companies across the world from meeting supply over the last few years — companies like Volkswagen VWAGY, Nintendo NTDOY and Apple (AAPL) - Get Apple Inc. Report have all struggled to secure enough semiconductors to meet customer demand for their products in 2021.
As producing this chip requires costly state-of-the-art infrastructure, only a few companies currently have the resources to do so. Pressure to ramp up production and open new factories is high. In November, Taiwan Semiconductor Manufacturing Company TSMC and Sony Group Corp. SONY partnered to build a $7 billion in the southwestern city of Kumamoto by 2024.
"The demand for semiconductors remained strong, and our factories performed exceptionally well in a highly dynamic environment where matched sets posed huge challenges for our customers, and overall industry supply remained very constrained", said Intel CEO Pat Gelsinger, during the third-quarter earnings call on September 25.
And, he added that "the digitization of everything accelerated by the four superpowers of AI, pervasive connectivity, cloud to edge infrastructure, and ubiquitous compute are driving the sustained need for more semiconductors, and the market is expected to double to $1T (trillion) by 2030."
Intel did not return a request to comment.
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The company has four production sites in the U.S.
A Push To Go Local For National Security
These reports come as American legislators have also been pushing for more local production to avoid being too dependent on Beijing at a time of worsening U.S.-China relations.
While millions of dollars toward American semiconductor development has stalled in recent months, the U.S. House of Representatives bill is expected to move forward by mid-term election.
At Yahoo Finance's All Markets Summit in October, Gelsinger said it was "an unquestioned issue" when asked if too much chip production in the hands of overseas players is a national security risk.
Taiwan chipmaker TSMC controls 51% of the world's semiconductor market, and is, at the moment, the only company able to make some of the more advanced chips out there.
According to local reports, the New Albany factory will sit on a 3,200-acre plot of land that has been annexed from Licking County and be built over the course of ten years An official commitment to building the factory is expected to come from Intel on Jan. 21 but, if the factory does live up to what is currently being reported, it would be the biggest development in the state since Honda (HMC) - Get Honda Motor Co. Ltd. Report opened a car plant in Columbus in 1982.
"More confirmation that something big is coming to the New Albany area," local journalist Karen Kasler wrote on Twitter. "[...] Impact on Ohio's economy could be huge."
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January 15, 2022 at 02:59AM
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Intel To Invest $1 Billion In A New Chips Factory In Ohio, reports - TheStreet
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