Intel is investing $3.5bn to upgrade its New Mexico chip manufacturing plant with advanced 3D packaging technologies to help meet soaring demand for microchips essential for edge computing, 5G and artificial intelligence.
Construction at the Rio Rancho site is slated to start in late 2021, which means any extra capacity is unlikely to ease the global chip shortage in the short term.
Intel will boost its manufacturing capabilities with its Foveros advanced 3D packaging technology, which stacks compute tiles vertically on chips rather than side-by-side. This approach gives Intel more options to mix and match processor components. According to the US company, this can “optimise for cost and power efficiency.”
Intel said on Monday that the New Mexico expansion will create at least 700 high-tech jobs, adding to the 1,800 people already employed at the site. It is also expected to create an additional 1,000 construction jobs.
The investment is part of Intel’s “IDM 2.0” strategy, announced last month, which includes a $20bn investment to build two new fabrication plants in Arizona for manufacturing physical chips. It follows other expansions at Intel sites in Oregon, Israel and Ireland.
It will also see the creation of Intel Foundry Services, a standalone business to provide foundry capacity in the US and Europe.
Intel is an integrated device manufacturer (IDM), which means it both designs and manufactures integrated circuits. Other players in the chip industry, such as Qualcomm and Nvidia, create semiconductor designs but outsource manufacturing to separate companies with fabrication plants, such as Taiwan Semiconductor Manufacturing Company (TSCM).
“A key differentiator for our IDM 2.0 strategy is our unquestioned leadership in advanced packaging, which allows us to mix and match compute tiles to deliver the best products,” said Keyvan Esfarjani, Intel senior vice president and general manager of manufacturing and operations. “We’re seeing tremendous interest in these capabilities from the industry, especially following the introduction of our new Intel Foundry Services.”
Newly appointed Intel CEO Pat Gelsinger launched IDM 2.0 in a bid to keep pace with competitors. In its latest quarterly results Intel reported revenues of $19.7bn, down 1% year on year. Gelsinger said that Intel plans to continue manufacturing the majority of its chip products internally.
As of December 2020, the company had 10 assembly test manufacturing locations, six wafer fabrication sites and a Costa Rica site, according to GlobalData’s Intelligence Centre.
Intel rivals including TSCM and Samsung recently announced their own multi-billion dollar investments into increasing chipmaking capacity amid a global chip shortage, caused by Covid-19, severe weather, geopolitical tensions and a factory fire.
Intel has invested $16.3bn into supporting its New Mexico operations since 1980.
“Intel’s $3.5 billion investment in New Mexico will create 700 new jobs in the next three years and establish the Rio Rancho campus as the company’s domestic hub for advanced semiconductor manufacturing,” said New Mexico Gov. Michelle Lujan Grisham. “With this exciting development, we are already seeing the benefits of this year’s legislation expanding LEDA, generating high-quality and high-paying jobs for New Mexicans.”