Intel Corporation (NASDAQ: INTC) unveiled its plans to invest at least $20 billion towards two new advanced chip-making plants in Ohio with an aim to tap the burgeoning demand for semiconductor chips amid a prolonged global chip shortage.
Mega-site Could Become World’s Largest Semiconductor Site
Spanning nearly 1,000 acres near Columbus, the planned “mega-site” can accommodate up to eight chip factories and will be able to support dozens of ecosystem partners and suppliers.
Notably, the site has the potential of becoming the largest semiconductor manufacturing site in the world at full capacity. It is estimated the total investment in the site could grow to as much as $100 billion over the next decade.
The site will lay a new foundation for advanced chipmaking in the U.S. and strengthen Ohio’s leadership in research and hightech areas.
Details of Intel’s Investment
The new facilities will strengthen Intel’s domestic lab-to-fab pipeline driving a new generation of innovative products as part of the company’s IDM 2.0 strategy.
Notably, Intel has committed another $100 million towards partnerships with educational institutions to support the development of the new site, to build a pipeline of talent, and bolster research programs in the region.
Moreover, the new factories will aid the rising demand for the Intel’s new foundry business, Intel Foundry Services (IFS).
The first phase of the project is expected to create 3,000 jobs at Intel and another 7,000 construction jobs, along with several local jobs in the long-term.
Construction of the first two factories is expected to begin late in 2022, while the production is expected to begin in 2025.
Ohio Governor Weighs In
Sharing his excitement over the largest single private-sector investment in Ohio’s history, Governor Mike DeWine, commented, “Intel’s new facilities will be transformative for our state, creating thousands of good-paying jobs in Ohio manufacturing strategically vital semiconductors, often called ‘chips.’
He further added, “Advanced manufacturing, research and development, and talent are part of Ohio’s DNA, and we are proud that chips – which power the future – will be made in Ohio, by Ohioans.”
Intel CEO, Pat Gelsinger, stated, “Intel’s actions will help build a more resilient supply chain and ensure reliable access to advanced semiconductors for years to come…Intel is bringing leading capability and capacity back to the United States to strengthen the global semiconductor industry.”
Wall Street’s Take
Following the news, Credit Suisse analyst John Pitzer maintained a Buy rating on the stock with a price target of $80 (53.7% upside potential).
Overall, the stock has a Hold consensus rating based on 5 Buys, 11 Holds, and 7 Sells. The average Intel price target of $54.95 implies 4.07% upside potential from current levels.
Intel scores a 9 on 10 from TipRanks’ Smart Score rating system. This makes it one of TipRanks’ Top Stocks and implies that the stock has strong potential to outperform market expectations.
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