Intel plans to invest an initial amount of more than $20bn to build two chip factories near Columbus, Ohio, helping to boost US efforts to develop local manufacturing capacity and supply chains for critical technologies.

The project is the largest private sector investment in the Midwestern US state’s history, with construction set to begin late in 2022, according to a statement released on January 21. The initial phase of the project is expected to create 3000 Intel jobs and 7000 construction jobs.

Ohio governor Mike DeWine called Intel’s announcement “monumental” news, adding that the new facilities will be “transformative” for Ohio. The investment is expected to attract dozens of suppliers for Intel’s operations, which are expected to come online in 2025.

The Santa Clara, California-based company’s initial capital expenditure plans of at least $20bn is more than the state of Ohio has attracted in any previous full year across all sectors of the economy, according to fDi Markets, which tracks greenfield investments announced by foreign companies and firms headquartered in other US states.

Located in Licking County, just outside the Ohio state capital of Columbus, the project will be built out on a ‘mega-site’ spanning 4 sq km. It has enough room to accommodate eight chip factories – known as fabs – as well as suppliers and ancillary services. 

Intel said that the total investment in the Ohio site could reach as much as $100bn over the next decade, making it “one of the largest semiconductor manufacturing sites in the world”. The Ohio mega-site is Intel’s first new manufacturing location in 40 years. 

“Intel’s actions will help build a more resilient supply chain and ensure reliable access to advanced semiconductors for years to come,” said Pat Gelsinger, Intel’s CEO, adding that the company aims to bring capacity back to the US to strengthen its chip industry.

Over the past few decades, the US share of global semiconductor manufacturing capacity has declined from 37% in 1990 to just 12% in 2020, according to the Semiconductor Industry Association. 

The US aims to develop domestic semiconductor research, design and manufacturing through $52bn of federal funding under its CHIPS Act, which passed Congress back in June 2021. Intel said the “scope and pace” of the Ohio project will depend heavily on funding from the CHIPS Act.

The global shortage of semiconductors that started during the pandemic, has led chipmakers to plan huge capacity expansions in large markets including Japan, China and the US. 

Following Intel’s planned mega-site in Licking County, Ohio is now among just three other US states to have attracted at least $20bn worth of semiconductor investment, according to fDi Markets. These includes Arizona, where TSMC plans to invest $12bn into a fab in the city of Phoenix, and Texas, where Samsung intends to invest $17bn into its second US fab in Texas.  

Given the importance of semiconductors in critical applications, including electric vehicles, artificial intelligence and quantum computing, Ohio state officials are bullish about the economic development opportunities Intel’s plans present. 

“These factories will create a new epicenter for advanced chipmaking in the US that will bolster Intel’s domestic lab-to-fab pipeline and strengthen Ohio’s leadership in research and high tech,” said Mr Gelsinger.