Intel to add 2 factories to its Chandler campus; $20B investment in Arizona will create thousands of jobs

Computer chip giant Intel announced Tuesday that it will spend $20 billion to build two additional factories in Arizona, a move heralded as the largest private-sector investment in the state's history.

The new factories will employ more than 3,000 workers and will locate at Intel's current campus in Chandler, the company said.

“We are setting a course for a new era of innovation and product leadership at Intel,” said CEO Pat Gelsinger in a speech broadcast to the Chandler complex. He said the project also would create 3,000 construction jobs and 15,000 "local long-term jobs" at suppliers and others around the state.

"Hundreds of local companies stand to benefit from our announcement today," Gelsinger said, adding that planning and construction will start immediately.

"To make our new expansion in Arizona possible, we are excited to be partnering with the state of Arizona and the Biden administration on incentives that spur this type of domestic investment," he added.

An array of state officials, including Gov. Doug Ducey, attended the outdoor event on a chilly, blustery day at the Chandler Ocotillo campus to welcome the news.

“Today’s announcement means jobs, jobs, and more jobs for the state of Arizona,” Ducey said. "Arizona is a jobs juggernaut."

The company heralded high pay and generous benefits for the new positions but didn't provide specifics.

Intel currently employs 12,000 people in Arizona, and this expansion will increase that by about 25%. The 3,000 additional jobs will include engineers and technicians. The company also will increase its chip-making capacity in Europe.

The Ocotillo campus in Chandler currently has four factories, or "fabs." Arizona was chosen for its long four-decade history as an Intel center, which already is the company's largest manufacturing site. It covers about 700 acres.

Metro Phoenix has become a hub for making semiconductors or chips, which help control an increasingly vast array of machinery from cellphones and computers to automobiles and medical equipment. Another global giant, Taiwan Semiconductor Manufacturing Corp., has started to build its own $12 billion factory in north Phoenix.

While manufacturing microchips is a water-intensive process, Intel is not concerned about a lack of supply in Arizona.  

Keyvan Esfarjani, a senior Intel vice president, said Intel is "absolutely confident we'll have a sufficient supply of water" to meet the needs of the new manufacturing center.

Intel already recycles more than 9 million gallons of water each day in Chandler.

The company also claims to purchase green power for its entire energy needs, such as from the 100-megawatt East Line Solar Plant in Coolidge.

U.S. Secretary of Commerce Gina Raimondo, who attended the Chandler event via webcast, said the investment will strengthen America's economy and national security.

"We have underinvested in (semiconductor) production and hurt our innovative edge, while other countries have learned from our example and increased their investments in the industry," she said.

The $20 billion investment will include construction and extend over several years.

Production will start around 2024, the company said. Intel also claims the expansion will have an economic impact of $8.6 billion in Arizona.

Ducey noted that copper, cattle, cotton, citrus and climate have been known as the state's "Five C's," and he said that "today we can safely add a new one — chips."

Intel's expansion decision in Chandler, where the company ranks as the city's largest employer, was not influenced by Taiwan Semiconductor's move into the region, Esfarjani said.

U.S. Sen. Kyrsten Sinema, D-Ariz., said the Intel expansion was partly the result of the recently enacted CHIPS for America Act.

The bipartisan legislation, which she co-sponsored, would provide assistance in grants for advanced semiconductor manufacturing and research.

Provisions of the bill, designed to strengthen the domestic industry, were included in the 2020 National Defense Authorization Act.