Intel will invest $20 billion to create two cutting-edge chip factories in central Ohio to meet the surging demand for advanced semiconductors, the company said today. They won’t have to look far to find potential customers.
The new factories will be built in Licking County, Ohio, which is also home to one the country’s fastest-growing clusters of hyperscale data centers. Facebook, Google and Amazon Web Services all have large cloud campuses in New Albany, where the Intel plant will be built.
The proximity of an Intel chip factory to data centers is not unique, as this trend is also seen in Hillsboro, Oregon, where a cloud cluster sprung up around a large Intel plant. But in Ohio, the data centers preceded the chip factory. Intel is also building several chip foundries in the Phoenix area, which is also home to a major concentration of cloud data centers.
The combination of Intel factories and cloud clusters is an interesting new wrinkle in the economic development impact of large data center operations. What’s clear is that the Intel factories will be an economic game-changer for the Columbus region.
Intel Targets Chip Shortage With New Fabs
“Today’s investment marks another significant way Intel is leading the effort to restore U.S. semiconductor manufacturing leadership,” said Pat Gelsinger, the CEO of Intel. “Intel’s actions will help build a more resilient supply chain and ensure reliable access to advanced semiconductors for years to come. These factories will create a new epicenter for advanced chipmaking in the U.S. that will bolster Intel’s domestic lab-to-fab pipeline and strengthen Ohio’s leadership in research and high tech.”
The Intel “mega-site” outside Columbus spans 1,000 acres and can accommodate a total of eight chip factories – also known as “fabs” – as well as support operations and ecosystem partners. At full buildout, the total investment in the site could grow to as much as $100 billion over the next decade, making it one of the largest semiconductor manufacturing sites in the world. Construction is expected to begin late in 2022, with production expected to come online in 2025.
As part of today’s announcement, Air Products, Applied Materials, LAM Research and Ultra Clean Technology said they plan to establish a presence in the region to support the buildout of the Intel site, with more companies expected in the future.
“Building this semiconductor mega-site is akin to building a small city, which brings forth a vibrant community of supporting services and suppliers,” said Keyvan Esfarjani, Intel senior vice president of Manufacturing, Supply Chain and Operations. “Ohio is an ideal location for Intel’s U.S. expansion because of its access to top talent, robust existing infrastructure, and long history as a manufacturing powerhouse.”
New Albany Home to a Growing Cloud Cluster
Ohio also has a huge data center cluster, where the world’s largest hyperscale cloud operators ae deploying millions of servers. The focal point of this growth is New Albany, where several data center campuses have been built just inside the border of Licking County.
The data center growth in New Albany began in 2014 with Compass Datacenters, which cited strong interest in the region from data center clients. Shortly after, Amazon Web Services built three campuses in the region, and Facebook placed a campus in New Albany. Among multi-tenant providers, the area has become a key hub for Cologix, which is deploying 70 megawatts of capacity in Columbus. STACK Infrastructure also operates a campus in New Albany.
These data center hubs offer economies of scale, enabling companies to rapidly add server capacity and electric power as more workloads shift from in-house IT rooms into these massive server farms. It has become routine for hyperscale companies to invest more than $1 billion in a single location where they place a cloud campus.
As the Internet cloud builders seek to distribute large files to support videos, gaming and virtual reality, the center of the country is proving to be the ideal place to add data center capacity. Placing data centers in places like Ohio and Iowa makes it easier to distribute content to major markets like Chicago and Dallas, reducing lag and buffering for streaming media like Netflix movies or Facebook videos. It also allows for data to move quickly to either coast, which can be important in application development.