Why Intel’s $20B Chip Factory Will Not Solve Current Shortage

Intel recently revealed a $20 billion investment for two new Ohio semiconductor facilities. The company hopes to decentralize the manufacturing of this essential technology for devices, such as consoles and graphics cards. Due in part to the fact that the great majority of chips are made in Asia, several governments — such as those in Japan — are also interested in locating facilities in their respective countries.

Not Operational Until 2025

To put it another way, this Intel statement is unfortunate news; the plants won’t be operational until 2025. So, it won’t solve any immediate concerns, but it will at least help avoid a repetition of the 2020 crisis.

During his press conference at the White House, US President Joe Biden described the announcement as a “historic event,” pointing out the impact that chip shortages have had on the automotive sector, despite the fact that, as previously said, the video game business has a strong connection to it. Last year, both Samsung and Micron made firm commitments to establish manufacturing facilities in the U.S.

$52 Billion Investement Plan

• Biden and the main semiconductor manufacturers (Intel, AMD, and Nvidia) have been urging Congress to approve a $52 billion investment plan in the United States semiconductor industry. “CHIPS for America Act” (January 2021) is still awaiting its funds.
• Intel stated last year that it will be expanding its facility in New Mexico. Additionally, they will be constructing two other facilities in Arizona. America only manufactures 12% of world chips. Yet, this country accounts for over half (47%) of all transactions.
• The location of chip plants in countries does not always promise faster production because Intel’s chips will still be transferred to Asia for assembly, testing, and packaging, as reported by Time.

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