Intel plans to spend $20 billion on two new chip factories in Arizona.

Intel’s new chief executive is doubling down on chip manufacturing in the United States and Europe, a surprise that may please government officials concerned about component shortages and dependence on factories in Asia.

Patrick Gelsinger, Joe Took top job in february, Said on Tuesday that it planned to spend $ 20 billion on two new factories near existing facilities in Arizona. He also vowed that Intel would become a major manufacturer of chips for companies other than the production of processors that have long been designed and sold.

Intel had stumbled into developing new production processes that improve chip performance by packing more small transistors on each piece of silicon. Leading the race for that expensive commute was moved to Taiwan Semiconductor Manufacturing Company, or TSMC and Samsung Electronics, whose so-called foundry services make chips for companies that include Apple, Amazon, Nvidia and Advanced Micro Devices.

Some investors and analysts had pushed for Intel to shut down or discontinue manufacturing in favor of an outside foundry, an approach taken by most other chip companies to increase profits.

but An epidemic of semiconductors – fuel shortage Underlined the important role of chip factories in supporting many sectors of the economy for cars, appliances and other products. And ahead of recent concerns, concerns about the Asian foundries’ proximity to China had already prompted Congress and several branches of the Trump and Biden administrations to roll back plans to encourage more domestic chip manufacturing , Although funding was not yet appropriated.

Authorities in Europe have also called for proposals for new factories to reduce dependence on foreign factories.

“Intel’s strategy recognizes that the world now wants to depend on the ring of fire that is next to China,” said G. Dan Hutcheson, an industry analyst at VLSI Research. “It’s looking forward a lot.”

TSMC previously announced plans for a new factory in Arizona, a project valued at $ 12 billion and expected to receive federal subsidies. Samsung is seeking government incentives for a $ 17 billion expansion of its facilities in Austin, Texas.

Mr. Gelssinger, who first joined Intel at the age of 18, quit his job in 2009 after 30 years. He served eight years as chief executive of software maker VMware before Intel’s board persuaded Robert Swan to replace him Dropped out in january.

Intel said its new global foundry service will operate from the United States and Europe, with factory announcements to be announced in the next year. It already operates plants in Ireland and Israel.

“The industry needs more geographically balanced manufacturing capacity,” Mr. Gelssinger said.

Donald Parker, an Intel vice president, said that while it is investing $ 20 billion, Intel hopes to negotiate with the Biden administration and other governments to get incentives for its manufacturing expansion.

Although it makes most of the products in-house, Intel has long used external casting for some less advanced chips. Mr. Gelsinger said the company would expand the strategy to include some of the key microprocessors, the calculation engine used in most computers. 2023 will include some chips for PCs and data centers, he said, and give Intel more flexibility in meeting customer needs.

But manufacturing will remain a core part of Intel’s strategy, Mr. Jelsinger said, despite recent technical problems.

He said significant improvements were being made to its next production process, which was delayed last summer. Intel will also form a new partnership with IBM to develop new chip making technology.

Mr. Gelsinger’s plans are bound to satisfy skepticism. In addition to recent problems with manufacturing technology, Intel has in the past tried to work with smaller companies as a foundry for other companies.

But Intel has modified those plans in several ways. For one thing, it would be ready to license its tech crown jewels for the first time – the so-called x86 designs used in most computers in the world – so customers could incorporate that computing capability into chips that they could use for Intel. Design, the company said.

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