Intel: The economy is bad right now, but we still need more fabs


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Aug 17, 2014
Intel said it will continue building new chip manufacturing plants in the West despite a shrinking global economy because it's important to diversify supply chains and expand capacity for when it expects semiconductor demand to rebound.

The x86 giant reiterated its commitment to its multibillion-dollar manufacturing expansions in the US and in Europe through a Monday editorial written by Keyvan Esfarjani, the head of Intel's global operations.

While Esfarjani didn't explicitly say so, his editorial seemed geared towards skeptics who wonder why Intel is continuing with plans for big fab projects in Ohio and Germany when shortages of some chips have turned into gluts, as demand for electronics have cooled over the past several months.

After all, Intel is expected to be a major beneficiary of government subsidies from the US and EU, as well as regional governments, for its massive fab sites in Ohio and Germany. And the company's recent plunge in quarterly revenue likely has at least some wondering whether the new manufacturing plants will be a wise way to spend taxpayer money.

"Since we announced plans to build new semiconductor fab sites in Germany and Ohio, much has changed: geopolitical challenges have become greater, semiconductor demand has declined, and inflation and recessionary pressures are disrupting the global economy," Esfarjani wrote. Esfarjani, a key spokesperson for Intel's manufacturing expansion plans, said it's important to "acknowledge the abrupt change in the environment" while continuing to invest in greater capacity.

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