Intel to build new 300-mm fab in Arizona

SAN JOSE, Calif. — Seeking to secure its future capacity needs, Intel Corp. on Monday (July 25) announced plans to build a new 300-mm wafer fab at its site in Chandler, Ariz., at a cost of $3 billion. The facility is Intel's sixth 300-mm wafer fab to date.

The new factory, dubbed Fab 32, will begin production of leading-edge microprocessors based on 45-nm process technology. Production will start at the second half of 2007. Construction is set to begin immediately.

Intel is currently developing its 45-nm process within its D1D 300-mm development fab in Hillsboro, Ore., which was first disclosed in 2001 (see May 14, 2001 story). But the new Fab 32 plant will become the company’s first high volume fab for 45-nm products, said Bob Baker, senior vice president and general manager of Intel's Technology and Manufacturing Group, during a conference call on Monday.

The chip giant is currently ramping up its 90-nm products, with 65-nm designs due out later this year. Intel’s Fab 32 will be required “for capacity [needs] in ’08 and ’09,” Baker said.

"This investment positions our manufacturing network for future growth to support our platform initiatives and will give us additional supply flexibility across a range of products," said Paul Otellini, Intel’s CEO, in a statement.

The project will create up to 1,000 new Intel jobs at the Arizona site over the next several years. During the construction phase, more than 3,000 trade people will be hired to work on the project.

For months, Intel had been mulling over plans to build a new fab and Arizona was in the running (see Jan. 15 story). Intel reportedly picked Arizona for the new fab over New Mexico, Oregon and various locations in Asia, according to analysts.

Today’s announcement also created some confusion, as Intel was reportedly expected to build a fab in Israel. Israeli Prime Minister Ariel Sharon told his cabinet Sunday (July 24) that the world’s largest chip maker, Intel, has decided to build a much-discussed second wafer fab in the country, according to a MarketWatch report which cited other media as its sources.

Sharon had told a cabinet meeting that Craig Barrett, Intel’s chairman, had told him the company has decided to invest about $4 billion to build another plant in Kiryat Gat in the southern part of Israel, according to the report (see July 25 story).

Intel did not rule out the possibility about building a new plant in Israel. “We aren’t prepared to make an announcement on Israel,” Baker said.