Blog

With the world still suffering from a massive chip shortage, Intel has started construction on two new chip factories at its campus in Ocotillo, Arizona. Thanks to a $20 billion investment in its factory complex near Chandler, Arizona will be home to Intel’s largest factory in the world.

Although the COVID-19 pandemic is widely seen as the reason for the chip shortage, in the eyes of most industry insiders, the pandemic was more like the straw that broke the camel’s back.

After years of neglecting domestic production in favor of cutting costs, the supply chain has suffered tremendously.

With this new construction, Intel hopes to significantly ramp up its U.S. production, which will add thousands of jobs in Arizona. With ground broken on September 24, the race to get Intel’s two new fabs up and running is on.

Intel’s Expansion Efforts

Intel’s multi-billion dollar expansion effort at Ocotillo is part of enhancing their business model to incorporate a foundry model. This model will allow Intel to provide chip manufacturing services for both U.S. and international companies that lack fabrication facilities.

In addition to its foundry services, Intel also anticipates producing the vast majority of its products internally, relying on their chip facilities to manufacture their processors.

The goal will ultimately be to build both their internal and external production businesses, helping to reduce the global chip shortage—although such relief is unlikely before 2022.

Government Declares Chips a Strategic Resource

One of the driving factors in Intel’s expansion is the help it’s receiving from the federal government. Semiconductor chips have been designated as a “strategic resource” under the National Defense Authorization Act (NDAA), which allows the government to offer incentives to speed production.

One of these programs, known as the Creating Helpful Incentives for Producing Semiconductors (CHIPS) for America Act, is offering a package of incentives for businesses to increase domestic semiconductor production in the United States.

This act, which has been passed by the Senate, would provide up to a 40% refundable tax credit for companies investing in semiconductor manufacturing equipment or facilities through the end of 2024.

In addition, funding would be set aside for a federal matching program offered to companies that build foundries with advanced capabilities.

The Impact on Arizona

With the two new fabs being built in Ocotillo, Intel’s manufacturing site will house a total of four factories, all connected by an automated highway and situated on 700 acres. This would make it one of the largest manufacturing sites in the world.

The project is expected to generate a significant number of jobs in the area surrounding Ocotillo. More than 3,000 high-tech jobs are expected to be created, as well as 15,000 long-term jobs and 3,000 construction jobs.

Now is the time to make sure you have your Arizona contractor’s license so that you can take advantage of projects like these. RocketCert has the study tools you need to succeed.

Get in touch with RocketCert today to start pursuing your contractor’s license in Arizona!