Intel's $20 billion in new fabs won't end chip shortage

The Arizona fabs will boost Intel's new foundry business -- as it tries yet again to diversify from general purpose microprocessors.
Written by Tom Foremski, Contributor

Intel has begun building two massive chip fabs in Arizona at $10 billion a piece once fully equipped.

But these will not come into production in time to end a chronic semiconductor shortage that's crippling car manufacturers and many other industries.

Intel is the world's largest supplier of server, desktop and mobile computers. It is in the midst of a business transition towards also making custom chips for customers. Intel has tried this foundry model twice before.

See also: Micron sees supply-chain shortages 'easing throughout 2022' | Here's why the semiconductor industry gets into trouble predicting the future |  Europe wants to be a computer chip powerhouse again. It's not going to be easy

It requires Intel cooperating with chip design software developers and sharing details of its chip process with customers so that they can design custom chips.

The Intel fabs will join two other fabs already operating at the same site in Arizona. A further two fabs will be announced later this year also at the same site.

Intel has come under geopolitical pressure from the US government to keep cutting-edge chip manufacture within the US.

The current leader in chip technologies is Taiwan Semiconductor Manufacturing Corporation (TSMC) but Intel says it is catching up and will regain its former lead position.

TSMC's chips are vital to US military and US commercial markets but its position in Taiwan makes it vulnerable to disruption by China and its sword rattling in the region.

Intel is betting on considerable concessions resulting from the geopolitical issues and its leading market position. It could come form of tax relief and support for building new infrastructure its around its fabs.

Semiconductor manufacture used to need a lot of workers but today's production lines are totally automated because of the size and the weight of the silicon wafers.

The industry has cleaned up tremendously since its early days in Silicon Valley and its move to Arizona and New Mexico. Silicon Valley has some of the nation's largest superfund sites - toxic archives of its namesake past.

The chip industry uses more poisonous and toxic chemicals than any other but it does it with great control - able to deposit layers just a few atoms in width, and continually develop new materials.

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