Intel's $100B Ohio 'megafab' could become world's largest chip plant

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Intel's $100B Ohio 'megafab' could become world's largest chip plant
© Provided by CNET Intel’s Fab 42 in Chandler, Arizona Stephen Shankland/CNET

Intel has selected a 1,000-acre site in New Albany, Ohio, to be its third major US chipmaking location, with construction beginning this year and operations starting in 2025. Intel has committed to spend $20 billion on two chip fabrication facilities, or fabs, but ultimately expects a total of eight fabs in a plan that could reach $100 billion.

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“Our expectation is that this becomes the largest silicon manufacturing location on the planet,” Gelsinger told Gelsinger told Time magazine. He’s meeting at the White House Friday, with President Joe Biden expected to comment on the politically important project later in the day.

The announcement is a centerpiece of Intel’s effort to reclaim its chip technology lead and rejuvenate American manufacturing. Along with the new site on the outskirts of Columbus, Ohio, Intel also plans to build a second $100 billion “megafab” in Europe, but that decision is likely three or four months away, said Keyvan Esfarjani, who leads Intel manufacturing and operations.

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Taiwan Semiconductor Manufacturing Co. in Taiwan and Samsung in South Korea surged ahead when Intel’s previously steady chip miniaturization progress faltered more than a half decade ago. Many top chip designers, including Qualcomm, AMD, Tesla and Apple, rely on TSMC to make their products. Intel, under the leadership of an engineer again with the return of Pat Gelsinger as chief executive, is trying to catch up to TSMC and Samsung by 2024 and surpass them in 2025.

The Ohio megafab will be at the heart of the effort. Intel for years concentrated manufacturing in Arizona and Oregon, and the new site will be a third major hub, with at least 3,000 employees in a state that’s been hit hard by the US’s waning influence in manufacturing. The US share of chipmaking business has dropped from 37% in 1990 to 12% today, according to the Semiconductor Industry Association, a trade group, but Gelsinger wants to bring that back to 30%.

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Intel on Friday called this the largest private sector investment ever made in the state and said that it will spend a further $100 million on educational partnerships. It’ll employ 7,000 construction workers during peak activity, and indeed the supply of those laborers was one factor that drew Intel to Ohio, Esfarjani said. Other factors include favorable tax treatment on expenses like property taxes, land availability, partnerships with universities and community colleges to train Ph.D.s and technicians, and ready connections to power, water and natural gas. Intel evaluated more than 35 sites before picking Ohio, he said.

A look inside Intel’s mammoth Arizona chipmaking fab

  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Fab 42 is located at Intel’s newer Ocotillo campus in Chandler, Arizona. Along with Intel’s older campus in the city, Intel has 12,000 employees in Chandler, but the chipmaker is hiring 3,000 more as it builds and staffs Fab 52 and Fab 62 at the same site. Here’s a look inside.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    This Sapphire Rapids server processor, due to ship in 2022 under Intel’s Xeon server chip brand, comprises four larger “chiplets” housing processing engines and four smaller high-bandwidth memory modules to store data. They’re all connected with Intel’s high-speed EMIB links, a packaging innovation that Intel hopes will help it compete against rivals including TSMC and Samsung.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    A 300mm wafer is studded with hundreds of Meteor Lake test chips. In this case, a top layer of chiplets is bonded to a base layer. Through a process called dicing, the wafer is then sliced into individual processors.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Sapphire Rapids, an Intel Xeon server chip arriving in 2022, has four processing engines and four high-bandwidth memory modules in the configuration shown here. This view shows the substrate that’ll house eight of those elements, called chiplets. Narrow rectangular areas between are high-speed EMIB connections to link the chiplets. Such packaging technology is increasingly important in the chip industry.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Intel’s Ponte Vecchio processor, due to ship in 2022, is the brains of the Energy Department’s Aurora supercomputer. An Intel delay held up the machine’s arrival at Argonne National Laboratory, but Intel says its peak performance is double what was planned.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Intel’s Ponte Vecchio processor is a technological tour de force that combines 47 separate active silicon elements. Each chiplet is carefully bonded in a stack that sprawls outward using Intel EMIB connections and upward with Intel Foveros, an example of Intel’s packaging prowess. Intel relies on its rival TSMC to build the graphics processing units at the heart of the processor.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Meteor Lake, a PC chip due to ship in 2023, uses a second generation of Intel’s Foveros technology to stack chiplets into a full processor. This Meteor Lake test vehicle is used to ensure the Foveros packaging is working correctly, with no alignment or electrical connection problems.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Spools of plastic-sheathed “chiplets” flown from an Intel fab in Oregon are fed into chipmaking equipment in Intel’s CH-4 fab that carefully places each silicon slice to make a larger processor.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Meteor Lake test chips are squeezed side by side on a 300mm Intel wafer, with some processing elements individually bonded to others on the wafer’s base layer below. This PC chip is due to ship in 2023. These are test chips to validate Intel packaging technology, not fully functioning processors.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Meteor Lake, powering PCs arriving in 2023, combines multiple chiplets into one larger processor using Intel’s Foveros packaging technology. That stacks chiplets vertically and links them with high-speed data connections. Here, individual chiplets are bonded to a bottom base wafer layer made of uncut chips.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    This empty dirt lot in Chandler, Arizona, is where Intel has begun building Fab 52 and Fab 62, a pair of chip factories costing $10 billion each that should go online in 2024. The new fabs should add about 3,000 jobs on top of today’s 12,000 for Intel’s Arizona operations.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Intel street signs at Fab 42, at its Octotillo campus near Phoenix, have chipmaking-related names like Wafer Way, Angstrom Avenue, Cleanroom Corner, Transistor Terrace, Processor Parkway, Silicon Street, and Tick-Tock Trail.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Fabs are extraordinarily clean facilities, but chips are protected further within FOUPs — front opening unified pods — that are used to shuttle stacks of silicon wafers from one manufacturing step to another. Here, two FOUPs are mounted to the front of a chipmaking equipment module.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Chipmaking equipment at Intel’s fab 12, 22, 32 and 42 is connected with miles of ceiling tracks that shuttle plastic pods with stacks of silicon wafers.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Intel’s Ponte Vecchio processors — four are shown here side by side — are enormous by chipmaking standards. Each has dozens of interlinked chiplets with a total of more than 1 billion transistors, the fundamental data-processing element on a chip.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Individual chiplets are visible in this closeup of Meteor Lake test chips.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    The first step in entering a fab’s cleanroom is donning two sets of gloves from a wall dispenser. The outer pair is worn only long enough to put the full protective suit on.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Intel’s Fab 42 is an enormous presence in Chandler, Arizona. It’s linked to the earlier fabs 12, 22 and 32, and Intel has begun construction on the neighboring fabs 52 and 62 that’ll go online in 2024.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Plastic pods called FOUPs carry stacks of silicon wafers from one chip manufacturing step to another. It takes hundreds of steps to make a finished processor.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Fabs come with sprawling structures of support equipment to handle things like supplying power, purifying water and cooling air. It takes millions of gallons of pure water to run a fab. The Ocotillo campus can treat more than 9 million gallons of water every day, and Intel is working on improvements so that by 2030 it returns more water to parched southern Arizona watersheds than it uses.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    One step in the chipmaking process at Intel’s Fab 42 is etching equipment that removes layers of material from the surface of the silicon wafer.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Chipmaking requires many steps of applying materials to a silicon wafer, zapping them with a patterned light to alter the wafer surface, then treating that surface to add and remove material. Vapor deposition is one of the methods used to add layers to the wafer.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Chemical cleaning is one necessary step that must be repeated often while processing wafers into chips. Here plastic pods filled with silicon wafers link up to a bank of such machines.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Intel’s CH-4 fab, originally built in 1980 to manufacture 80286 chips, now houses Intel’s advanced packaging work to link multiple chiplets into one larger processor. That’s a key part of Intel’s effort to catch up to its chipmaking rivals in coming years.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    Silicon wafers are constantly measured and tested through the hundreds of steps it takes over about three months to turn them into silicon chips. Most of that inspection is automated, but this station lets humans take a close look, too. The wafer is the purple and green wafer to the left of the eyepieces.
  • Intel's $100B Ohio 'megafab' could become world's largest chip plant
    CNET reporter Stephen Shankland at Intel’s Fab 42 in Arizona.
  • Intel could get a boost from federal legislation called the CHIPS Act that would grant chipmakers $52 billion in subsidies. Congress has yet to allocate the necessary funding, but if it did, it would cut about $3 billion off the price tag of a $10 billion fab, making the US competitive with government incentives in South Korea and Taiwan, Intel has said. Intel will proceed regardless of the CHIPS Act’s progress, but the government subsidy will increase the size and speed of Intel’s expansion, Esfarjani said.

    “It is critically important to ensure that the CHIPS for America Act will pass through,” he said. “It really sets the pace and the size for a project like this.”

    Gelsinger, who returned to Intel last year after more than a decade away, took over as Intel CEO on the condition that the board support his plans for Intel’s recovery, which includes massive spending on new chipmaking capacity, he told CNET in an earlier interview.

    It’s tough to stay at the cutting edge of chipmaking, as evidenced by decisions in recent years by IBM and GlobalFoundries to no longer stay at the front of the pack. Chipmaking rewards high volume, where large-scale operations can justify the costs of developing advancements and building fabs.

    Engineers like Intel’s restored tech focus, but the company has plenty of convincing to do. Sanford Bernstein analyst Stacy Ragson has a negative rating on the stock as Intel tries to steer a new course “to atone for 10 years of sin.” In a report from earlier in January, he complained of Intel’s “ballooning” capital expenditures, declining profit margins, likely future losses in market share and “an aggressive roadmap fraught with risk, with outlandish growth targets.”

    Fabs are enormously expensive. The newest machines to inscribe electronic circuitry onto silicon wafers at the smallest scales are expected to sell for $340 million each on average, according to their maker, ASML. Intel is the first buyer of a next-generation machine, but learning how to use it effectively, an area where Intel lags Samsung and TSMC, will take time. TSMC plans to spend $40 billion to $44 billion on new fabs in 2022 alone.

    Gelsinger detailed a plan to accelerate Intel manufacturing progress, with upgrades coming roughly annually. The most advanced “node” the company disclosed on this manufacturing process road map is called Intel 18A. The Ohio site will manufacture chips with Intel 18A or a more advanced process, according to Esfarjani.

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    The Ohio site will significantly increase Intel capacity. Chips are inscribed on silicon crystal wafers 300mm (about 1 foot) in diameter, with dozens or hundreds of chips on each wafer depending on the chip size. Each Intel fab typically processes 4,000 to 6,000 wafers per week, Esfarjani said.

    Chipmaking isn’t just a lucrative business for the company doing the manufacturing. It also means money for a constellation of other companies that supply fabs and that package their products into electronics.

    As occurred with its Oregon and Arizona operations, Intel expects a surge of supporting businesses to join it in Ohio.

    “We start pretty much with nothing, and we build this city, the ecosystem [of] vendors and suppliers and the partners,” Esfarjani said. “Already we are getting a lot of excitement from our suppliers. They’re all in, and they’re ready to come as well.”

    With processors crucial to everything from washing machines and cars to military aircraft and schools, CHIPS Act proponents want to keep the US from being reliant on overseas companies for semiconductor manufacturing. A global chip shortage, triggered by the COVID-19 pandemic, has revealed how many industries are crippled when they can’t ensure supply. Part of Gelsinger’s recovery plan for Intel is to build chips for others, not just itself, with a new business unit called Intel Foundry Services.

    It’s not yet clear how much the Ohio fabs capacity will go to Intel and how much will go to foundry customers, but trying to increase capacity is critical

    “Right now, our problem is, more of a demand side,” Esfarjani said. “We need to make more than what we have.”

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