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Intel is constructing two Chip factories in Arizona, Why it matters?

Intel Corp. broke ground on two new plants in Arizona on Friday as part of its recovery strategy to become a major chipmaker for external customers.

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The $20 billion facilities, called Fab 52 and Fab 62, would raise Intel’s site in Chandler, Arizona, to a total of six factories. They will contain Intel’s most sophisticated chipmaking technology and will play a key part in the company’s quest to reclaim its dominance in manufacturing the smallest, fastest chips by 2025, after falling behind competitor Taiwan Semiconductor Manufacturing Co Ltd.

The new Intel facilities in Arizona will be the first to be constructed from the ground up with space set aside for outside customers. Intel has traditionally manufactured its own chips, but its recovery strategy includes taking on work from other companies like Qualcomm Inc. and Amazon.com’s cloud segment, as well as strengthening its manufacturing ties with the US military.

“We want to have better supply chain resilience,” Intel CEO Pat Gelsinger told Reuters in an interview earlier this week after attending a White House meeting on the worldwide chip shortfall. “As the only business on American soil capable of doing the world’s most advanced lithography techniques, we’re going to go all out.”

It’s too early to say how much of the new facilities’ capacity will be allocated for outside customers, according to Gelsinger. The facilities would generate “thousands” of wafers every week, he added.

Wafers are silicon discs that are used to make chips and may store hundreds or even thousands of them. TSMC, an Intel competitor, has also bought the property in Phoenix for its first U.S. campus, which will house up to six chip manufacturers and is close to Intel’s site.

Why do the two labs matter?

The two new fabs in Arizona will not only meet Intel’s expanding product demand but will also offer committed capacity for Intel Foundry Services, which was recently announced (IFS).

Intel Foundry Services opens its doors to fulfill the demands of foundry clients all around the world, many of whom are searching for better regional balance in the semiconductor supply chain.

The new fabs will produce Intel’s most advanced process technologies, including Intel 20A with the new RibbonFET and PowerVia breakthroughs, when they are completely operational in 2024.

Intel is the only semiconductor firm in the United States with cutting-edge process and packaging development capabilities, and the company is investing in domestic capacity to meet the growing global demand for chips in a variety of markets, including PCs, cars, data centers, and more.

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