Intel Planning to Build Massive New Semiconductor Factory in Ohio

Andrew J. Tobias, cleveland.com

Intel is the company that has decided to build a major new computer-chip factory in the Columbus, Ohio area in what could be the largest economic development project in state history, according to sources.

State officials have declined to comment on the news of a chip factory coming to the state, which cleveland.com and The Plain Dealer first reported earlier this week. But sources said Intel, which hasn’t returned messages, is working with local, state and federal government officials to finalize an announcement soon.

Details of the project have been tightly guarded. Intel notified Gov. Mike DeWine and other state officials in late December that the company had selected Ohio for its planned factory, winning out over a competing proposal from New York, sources said. Asked about the letter earlier this week, DeWine declined to comment, instead responding by generally talking about the economic importance of semiconductors. Cleveland.com and The Plain Dealer have filed a public-records request for the letter, but the DeWine administration has not produced it.

The factory is planned in New Albany, an affluent suburb about 20 miles east of Columbus, and would employ thousands of workers and cost tens of billions of dollars. As part of planning for the project, local government officials last week approved a deal that eventually will pave the way for New Albany to annex 3,600 acres from the surrounding unincorporated area in Licking County.

However, the specific scope and timing for the project will be tied to federal legislation that would send billions of dollars of subsidies to domestic semiconductor producers. The Democratic-controlled Senate passed the U.S. Innovation and Competition Act in a bipartisan vote last June, although the measure has stalled in the Democratic-controlled House. Both Republican and Democratic officials in Ohio, including DeWine earlier this week, have called on Congress to approve the bill. President Joe Biden’s administration also has pressed the House to act.

Intel CEO Patrick Gelsinger announced last August that the company plans to build a new “mega-fab” chip factory somewhere in the United States. It would be built in phases over 10 years, Gelsinger told The Washington Post.

When complete, the complex will cost $100 billion and employ 10,000 workers, Gelsinger told the Post. The company planned to make an announcement before the end of the year, although it recently amended its timeframe to early 2022.

In the interview with the Post, Gelsinger described the planned complex as a “little city,” supporting 100,000 additional related jobs.

Gelsinger said factors in the company’s site-selection included proximity to a university. Ohio State University’s computer science and electrical engineering program last year entered the U.S. News and World Report’s Top 25 rankings, according to university officials.

Any major economic development project likely will attract major state subsidies, including from JobsOhio, the state’s private economic development arm. JobsOhio, created by then-Gov. John Kasich in 2011 to largely replace the state Department of Development, is funded by profits it makes running the state’s monopoly on liquor sales.

JobsOhio officials previously have touted a $6 billion petrochemical processing plant planned for Belmont County in Southeast Ohio as the state’s largest economic development project in history. JobsOhio has given $70 million in incentives to cover preliminary costs for that project, including preliminary site work. The facility, which was expected to employ 500 people, has stalled as global prices for oil and plastic shifted, and its status is unclear.

In recent months, Intel and other semiconductor companies have announced plans to expand in the United States, part of the trend of “reshoring,” or moving manufacturing capacity for the economically crucial industry back to America from overseas. Intel also is planning new factories in Germany, Italy and France, according to Bloomberg News.

The coronavirus pandemic and its associated labor shortages and supply-chain disruptions have been major factors in the recent national shortage of computer chips, used for cars, electronics and many other common consumer goods. Tensions between China and the United States also are a factor, and U.S. officials have viewed growing domestic chip-manufacturing capacity as a national security issue.

Intel also is in the process of raising billions of dollars by publicly selling shares of stock in Mobileye, a self-driving car company it acquired in 2017. The move is expected to be completed later this year, according to the Wall Street Journal.