CHANDLER, Ariz — As the world is dealing with a global semiconductor chip shortage, Arizona is expected to be a chip wafer hub.
Intel broke ground on two semiconductor fabrication facilities, or fabs, at the company’s Ocotillo campus in Chandler on Friday.
A total of six fabs on the site will make Arizona’s facility the company’s largest in the world, producing “thousands” of wafers a week, Intel’s CEO Pat Gelsinger told Reuters. A single wafer can contain hundreds to even thousands of chips.
“We want to have Arizona and Intel be the unquestioned leaders for the world’s supply of leading-edge semiconductors,” Gelsinger said during the groundbreaking event. “Semiconductors are a hot topic these days and we face a global shortage that is causing chips to halt and slow the production of many other areas of the economy.”
Amid the pandemic, the production of semiconductors fell after COVID-19 forced factories to close, leading to a domino effect of supplies shortages. For months the process was halted, to only get saturated when demand for consumer electronics caused shifts that rippled the supply chain.
“These are truly huge developments for our state, yet they don’t begin to scratch the surface of what this means for everyday Arizonans,” said Governor Doug Ducey at the event.
Intel is promising to bring 3,000 high-tech jobs to the Valley and another 3,000 to 4,000 construction jobs.
The facility is expected to be fully operational by 2024.
The Semiconductor Industry Association said 75% of chips are currently made in Asia. They said in the last 30 years, the U.S. share of global semiconductor manufacturing fell from almost 40% to 12%.
To increase that gap, tech companies are investing in Arizona. Intel’s rival, Taiwan Semiconductor Manufacturing plans to have its first own campus in Phoenix by 2023.
The chip shortage is expected to continue throughout 2022, Commerce Secretary Gina Raimondo said at the White House Semiconductor convening on Thursday.
“The situation seems to be getting worse,” Raimondo said. “We are hearing regularly from companies that cannot get the supply they need. We also know the delta variant has closed down key factories.”
It’s estimated the computer chip shortage will cost the auto industry alone $210 billion this year, a study by consulting firm AlixPartner reported this week.
Intel’s factory expansion in Chandler will support the growing demand for the company’s products and provide committed capacity for Intel Foundry Services customers, the company said.
“This has created the right conditions for this to become the silicon desert, a place that every other state, every other country wishes they were here,” Gelsinger said.
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