Intel launches $20 billion expansion plan

Intel CEO, Pat Gelsinger, has outlined the company’s path forward to manufacture, design and deliver products and create long-term value for stakeholders. During a webcast, Gelsinger shared his vision for “IDM 2.0,” a major evolution of Intel’s integrated device manufacturing (IDM) model. The CEO announced major manufacturing expansion plans, starting with an estimated USD 20 billion investment to build two new fabs in Arizona. At the same time, Intel is planning to become a major provider of foundry capacity in the U.S. as well as Europe. “We are setting a course for a new era of innovation and product leadership at Intel,” said Gelsinger. “Intel is the only company with the depth and breadth of software, silicon and platforms, packaging, and process with at-scale manufacturing customers can depend on for their next-generation innovations. IDM 2.0 is an elegant strategy that only Intel can deliver – and it’s a winning formula. We will use it to design the best products and manufacture them in the best way possible for every category we compete in.” According to a press release, IDM 2.0 represents the combination of three components which together will help the company drive itself towards the top of the food chain. Intel’s global, internal factory network for at-scale manufacturing is described as a key competitive advantage. And in the company’s latest announcement, Gelsinger re-affirmed the company’s expectation to continue manufacturing the majority of its products internally. Expanded use of third-party foundry capacity is the second component to bring the company to the top. Intel expects to build on its existing relationships with third-party foundries, which today manufacture a range of Intel technology – from communications and connectivity to graphics and chipsets. Building a new foundry business, Intel Foundry Services, will be the third component, or leg, aimed at bringing the company towards pole position. To deliver this vision, Intel is establishing a new standalone business unit, Intel Foundry Services (IFS), led by semiconductor industry veteran Dr. Randhir Thakur, who will report directly to Gelsinger. The two new fabs to be build in Arizona is the kickstart of Intel’s accelerated IDM 2.0 strategy. The fabs will be located at the company’s Ocotillo campus. The build-out represents an investment USD 20 billion, and is expected to create over 3,000 permanent high-tech, high-wage jobs. Intel expects to accelerate capital investments beyond Arizona, and Gelsinger said he plans to announce the next phase of capacity expansions in the U.S., Europe and other global locations within the year.