As the U.S. semiconductor industry awaits enactment of a chip legislation that among other things would provide tax and other incentives to build domestic foundries, Intel Corp. is in the midst of negotiations to construct a U.S.-based “mega-fab” designed to revive American chip production.

Intel CEO Pat Gelsinger said negotiations with local officials are ongoing, and the company expects to announce a U.S. site by the end of the year. Along with necessary foundry infrastructure, including inexpensive power and plentiful water, the chip maker also wants to locate its new fab near a university.

In an interview streamed by the Washington Post, Gelsinger said the new mega-fab would include between six and eight modules supporting leading-edge process and packaging technologies. Among the goals is “building a little city,” Gelsinger said, that would attract IC suppliers while becoming a hub for training chip designers and badly needed production engineers.

The new fab, costing as much as $15 billion, would be “entirely transformational,” Gelsinger asserted, as the U.S. seeks to recapture a greater share of global chip-making capacity.

“We need a more resilient but also globally balanced supply chain,” added Gelsinger. Pending legislation providing tax incentives and fund chip R&D would help expand U.S. chip makers’ share of global production from about 12 percent to 30 percent over the next decade as the semiconductor supply chain is reoriented away from Asia, the Intel CEO argued.

Gelsinger said Intel is urging lawmakers, “Go fast! Let’s get this into law because I want to build factories a lot of faster than we can today.”

Tax breaks and other incentives to rebuild western chip manufacturing address the offsets offered by China and others that have made building fabs in Asia economically attractive as western chip makers struggle to compete.

“It’s not like the U.S. or Europe said ‘We don’t want semiconductors in the U.S.’ It’s that the Asians said, ‘We do want them in Asia.’ And they’ve put strong incentives in place to really underscore and make those industries much more competitive being built in Asia,” Gelsinger said.

Since taking the helm five months ago, Gelsinger has moved aggressively to reinvigorate Intel after series of setbacks. The strategy includes investing $20 billion as Intel hustles to catch up with foundry rivals Taiwan Semiconductor Manufacturing Co. and Samsung.

Its entry into the foundry business includes new customers Amazon Web Services and Qualcomm. AWS will adopt Intel’s packaging technology while Qualcomm will base its smartphone platform on the chip maker’s A20 process node expected to be available in 2024.

Intel expects to regain its manufacturing leadership by 2025 when it introduces its 18A process node.

“Intel stumbled,” Gelsinger acknowledged. The mega-fab is a part of the company’s blueprint to regain chip preeminence. Brian Santo, EE Times editor-in-chief, went deep into Intel’s chip strategy with senior vice president Sanjay Natarajan during a recent podcast.

That strategy includes wringing every last transistor out of Moore’s Law. “We’re not done until we’ve exhausted the periodic table,” Gelsinger declared.

By EETimes