Intel this week reiterated plans to expand its production capacities in a bid to more quickly respond to increased demand. In the coming years the company intends to increase production of chips at three existing facilities and outfit a new fab with DUV and EUV tools. In addition, the company said it will develop its next-gen storage and memory technology at its manufacturing plant in New Mexico.

Back in 2017, Intel originally announced its intentions to finally furnish its Fab 42 in Arizona, which had been on hold for several years. The production facility will be used to make chips using Intel’s 7 nm manufacturing technology, which relies on DUV and EUV lithography tools. Intel has yet to announce exactly when it plans to start using this fabrication technology, but this week it said that it was making good progress in equipping the fab.

In addition, Intel intends to expand its manufacturing facilities in Oregon, Ireland, and Israel. The company has been discussing expansions of its fabs in Ireland as well as Israel for quite some time now, so it looks like the company will finally start these expansions in 2019. Meanwhile, the adding fab space to its Oregon plant – home to the company's development fabs – was unexpected and the company yet has to detail these plans.

Intel expects that the expansion of its production facilities will enable it to more quickly respond to demand increases. This faster response time will translate into higher sales, but will also increase Intel’s factory depreciation and OpEx costs.

In addition to expanding its own manufacturing capacities, Intel will also continue using third-party foundry services to make its various products when it makes business sense, including (but not limited to) entry-level SoCs or chipsets. The company collaborated with TSMC and other partners in the past, so the announcement just confirms that the company will continue to do so in the future even after it expands its own capacities, if third-party foundries offer the right technologies for particular applications.

Last but not least, Intel also made an announcement regarding the future of its storage and memory technology, which is being moved exclusively inside Intel after the company announced its intention to wind-down its long-standing joint development initiative with Micron. The chip giant will develop the tech at its manufacturing facility in New Mexico after it leaves IMFT plant in the coming quarters.

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Source: Intel

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  • sheh - Wednesday, December 19, 2018 - link

    Why does Intel do its main production, unlike assembly, in expensive countries?
    Let's say US plants are a sort of patriotism (unlikely), but why Ireland and Israel?
  • quorm - Wednesday, December 19, 2018 - link

    I'm guessing because these processes are highly automated and do not benefit from cheap, unskilled labor, while highly educated/trained workers are needed to maintain the machines.

    Chips are tiny so shipping isn't much of an issue. I guess there may be benefits to keeping these in countries with strong intellectual property laws as well.
  • ilt24 - Wednesday, December 19, 2018 - link

    I think the biggest reason is available talent. While yes China has the ability to educate capable people and has been, current U.S., EU and Japanese export laws prohibit shipping equipment required for a state of the art...14nm or below...factory in China. If you look at other lower cost countries they don't train people to work in the semiconductor industry.

    As far as Ireland goes, I think Intel built their original plant in the early 90's to have a factory within the EU. In the case of Israel, not sure what originally got them to do manufacturing their, that decision was made in the early 80's
  • Samus - Wednesday, December 19, 2018 - link

    Because Ireland and Israel have highly educated populations, and Germany\Japan\SK are too expensive.
  • woggs - Wednesday, December 19, 2018 - link

    The other answers already pretty much nailed it. Need skilled engineers and technicians to keep such precision operations running smoothly. Also need a highly stable environment. When a factory goes "down" for any reason, months of material can get scrapped, costing an immense amount of money and disruption to supply.
  • Darcey R. Epperly - Wednesday, December 19, 2018 - link

    Ireland is in the EU and has nearly no taxes. Israel has good labor and some military demands and those projects are highly beneficial.
  • 808Hilo - Thursday, December 20, 2018 - link

    Those decisions are unintended and are beneficial. It means nobody can start a war anymore because the economies run on intels subcontractors delivering in time. Without steady supply of various chips from various global sources production and the life of everything will simply stop.

    Spreading fabs among the US Commonwealth was a strategic decision to lessen that impact. Fabs are complex entities and getting more complex by the day and need aeons of peoples accumulated expertise to run and 10-15 years to build. Shorting a cable is enough - as we have seen at Samsungs plant last year. Nobody wants to work in Germany, so Ireland it is. Israel, military development and contract work and a good schoolsystem produce people with moderate payvisions. Same here. It would be hard to find good people working in a fab in Alabama so you find them in urban cities in Tx, Ca, Wa
  • BertrandsBox - Thursday, December 20, 2018 - link

    I can't answer for Israel, but as someone from Ireland, I feel I can give a pretty good answer as to why they would have chosen here.

    - The plant is located in Leixlip, on a large site less than 30 mins to Dublin (the capital), with large room for future expansion
    - Highly educated workforce, with a focus on ICT/engineering/etc. supplying a steady stream of graduates from the universities here
    - 12.5% tax rate
    - Legal system based on common law
    - Access to the European markets
    - Native English speakers
    - Good relationship with the US (e.g. US preclearance at major airports here)
    - Stable political environment
    - IRE £87m grant (equivalent to €196m/$225m today)
  • sheh - Thursday, December 20, 2018 - link

    Nobody wants to work in Germany? :) Why?

    I'm not sure labor in Germany/Japan/Korea is cheaper, but maybe.

    And I'm thinking, there are possibly two additional contributing reasons:

    Inertia. Whatever reasons they had in the past for building their first fab, once it's there there are benefits to sticking around.

    Concentrating operations. Intel's also been buying companies there, in recent years 2 in Ireland and 4 in Israel. And there were existing R&D centers, at least in Israel.
  • sheh - Thursday, December 20, 2018 - link

    P.S., there's also a fab in China, but for flash/3dxp.

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