Intel (INTC) has started construction on two new chip factories at its Ocotillo campus in Chandler, Arizona. Construction of the leading-edge factories is part of a $20 billion investment drive that will take investments in the state to over $50 billion. INTC shares rose 0.35% to close at $54.22 on September 24.
The investment should result in more than 3,000 “high-tech, high-wage Intel jobs,” in addition to 3,000 construction jobs, while also supporting 15,000 indirect jobs to the local community. Markedly, once fully operational in 2024, the factories will manufacture the company’s advanced process technologies, including the Intel 20A.
The two new factories should also strengthen Intel’s production capacity and capabilities for economic and national security. Additionally, they should address the strong demand for its products while supporting the recently launched Intel Foundry Services (IFS). (See Intel stock charts on TipRanks)
IFS President Randhir Thakur stated, “With Intel Foundry Services, Intel is opening its fab doors wide to serve the needs of foundry customers around the globe – many of whom are looking for more geographical balance in the semiconductor supply chain.”
In addition, the chip giant expects the two new factories, as part of the IDM 2.0 strategy, to play a big role in helping to rebuild the U.S.’s edge in the global supply chain.
Recently, Deutsche Bank analyst Ross Seymore reiterated a Hold rating on the stock with a $58 price target, implying 6.97% upside potential to current levels.
The analyst remains optimistic about Intel’s ability to fix and boost its manufacturing process technology, along with utilizing foundries to build leadership products.
Consensus among analysts is a Hold based on 9 Buys, 10 Holds, and 7 Sells. The average Intel price target of $61.14 implies 12.76% upside potential to current levels.
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