Intel is investing more than $7 billion to complete Fab 42, an advanced chip fabrication facility in Chandler, Ariz., CEO Brian Krzanich announced at a White House meeting with President Donald Trump on Wednesday.
"Fab 42 is an investment in our own future and will help ensure that the United States remains the global leader in the semiconductor industry," Krzanich wrote in a letter to employees sent on the day of the meeting.
The new plant will manufacture chips at the 7-nanometer process node, the most advanced chip fabrication process at the moment. Aligning with the Trump administration on employment, Intel stated that the new plant would create 3,000 high-wage jobs. Intel also claimed the facility would indirectly create more than 10,000 long-term jobs in the Arizona area.
"Fab 42 is an investment in our own future and will help ensure that the U.S. remains the global leader in the semiconductor industry," Krzanich wrote in a letter to employees.
Intel's $7 billion promise of employment contrasts with the chipmaker's 2016 response to ongoing difficulties in the PC industry. In a massive series of layoffs early last year, Intel said it would be cutting 11% of its global workforce, or 12,000 employees.
Intel dominates the PC industry, but that business has been declining over the past few years. The Santa Clara, Calif.-based company increasingly relies on its global data center business and the "Internet of Things," which includes everything from autonomous cars and drones to factory automation.
The majority of Intel's chip wafer manufacturing and R&D are based in the U.S., Krzanich said in the letter to employees, "despite the fact that from a tax and regulatory position we have been disadvantaged relative to the rest of the world where we compete."
"That’s why we support the Administration’s policies to level the global playing field and make U.S. manufacturing competitive worldwide through new regulatory standards and investment policies," Krzanich continued.
Silicon Valley was built on chips, but very little chipmaking actually gets done in the United States anymore. The majority of new chip fab plants are being built outside of the U.S., said tech analyst Patrick Moorhead. Intel's latest retrofit job was done in China, Moorhead said. Intel has some of the most advanced manufacturing capabilities in the chip industry.
Intel first announced construction of a $5 billion Arizona-based chipmaking facility in 2011, but postponed Fab 42's official opening in 2014. The facility will be "left vacant for now" Intel's Chuck Malloy told Reuters at that time. Renewed interest in the facility coincides with Trump's promise of lower taxes and fewer regulations for corporations, but Intel said the company is making the $7 billion investment now because it anticipates growth and it isn't related to the administration's policies.
"However, we join other companies in supporting the administration’s pro-business and pro-investment goals, which encourage long-term investments like this one," an Intel spokesman said.
"Government policies play a critical role in enabling and sustaining American-driven innovation," said Krzanich in his letter. "At Intel we meet with governments from around the world, discussing and debating issues and policies important to our business, employees and shareholders. When we disagree, we don’t walk away. We believe that we must be part of the conversation to voice our views on key issues such as immigration, H1B visas and other policies that are essential to innovation."
Trump tweeted out his support of Intel's announcement on Wednesday: "Thank you Brian Krzanich, CEO of @Intel. A great investment ($7 BILLION) in American INNOVATION and JOBS! #AmericaFirst"
Krzanich ties to Trump appear to have been established before the election. In June, the New York Times reported that Krzanich planned to host a fundraiser dinner for the presidential candidate at his house in Atherton, Calif. The event was cancelled following the news report, and Krzanich sent out the following tweet: "I do not intend to endorse any Presidential candidate. We are interested in engaging both campaigns in open dialogue on issues in technology."
Historically, Krzanich has tended to orient Intel with the sentiments of the tech industry. Last month, following the outcry against Trump's executive order banning refugees and visa holders from seven majority Muslim countries from entering the U.S., tech leaders came out forcefully against it. Krzanich wrote on Twitter: "As a company co-founded by an immigrant, we support lawful immigration. We will provide impacted employees with Intel's full support."
Along with more than 100 other tech companies, Intel also took part in a legal brief opposing the executive order.
