In $20bn push, Intel hopes to make US chip-making great again
Intel Corp says it will greatly expand its advanced chip manufacturing capacity as the United States-based technology giant’s new chief executive announced plans to spend as much as $20bn to build two factories in Arizona and open its plants to outside customers.
The announcement by CEO Pat Gelsinger on Tuesday aims to restore Intel’s reputation after manufacturing stumbles sent shares plunging last year. The strategy will directly challenge the two other companies in the world that can make the most advanced chips, Taiwan’s Semiconductor Manufacturing Co Ltd (TSMC) and South Korea’s Samsung Electronics Co Ltd.
And it will aim to tilt a technological balance of power back to the US and Europe as government leaders on both continents have become concerned about the risks of a concentration of chipmaking in Taiwan given tensions with China.
Intel shares rose 7.5 percent after the company disclosed its new strategy and full-year financial guidance for 2021. Some investors such as Third Point LLC had previously urged Intel to consider spinning off its costly chip manufacturing operations.
Intel said it expects $72bn in revenue and adjusted earnings per share of $4.55, compared with analyst estimates of $72.9bn and $4.77 per share, according to Refinitiv data. The company said it expects to spend $19bn to $20bn on capital expenditures.
Gelsinger said the 2021 forecast “reflects the industry-wide shortage” of some components.
‘All systems go’
Intel is one of the few remaining semiconductor companies that designs and manufactures its own chips. Rival chip designers such as Qualcomm Inc and Apple Inc rely on external contract manufacturers.
In an interview with the Reuters news agency, Gelsinger said Intel has “fully resolved” its problems with its most recent manufacturing technology and is “all systems go” on chips for 2023. It now plans a large manufacturing expansion…..read more
Source: Al Jazeera