Intel Unveils an $8 Billion Plant-Building and Hiring Plan
Intel (INTC) will spend as much as $8 billion to update manufacturing processes at its chipmaking plants in Arizona and Oregon, resulting in thousands of temporary and permanent jobs, the world's leading supplier of microprocessors said today.
The investment is expected to create 6,000 to 8,000 construction jobs and as many as 1,000 permanent high-tech jobs, Intel said in a statement. The plan also allows Intel to maintain its current manufacturing employment base in the U.S.
Intel's plans call for it to build a new development fabrication plant in Oregon and to upgrade four existing fabrication plants to manufacture its next generation of 22-nanometer microprocessors that use less energy while providing higher performance.
A More Rosy Assessment
"The most immediate impact of our multi-billion-dollar investment will be the thousands of jobs associated with building a new [fabrication plant] and upgrading four others, and the high-wage, high-tech manufacturing jobs that follow," said Intel President and CEO Paul Otellini in a statement.
Last week, Intel reported better-than-expected earnings, posting third-quarter profits of nearly $3 billion on revenue of $11 billion. The chipmaker's solid results eased fears among investors after the company reported in August that sluggish PC sales could hamper profits.
Intel delivered a more rosy assessment today, saying the PC industry is on track to sell 1 million computers a day, "a significant milestone." By investing in its plants, Intel said it will create the capacity for the continued growth of the PC market as well as for mobile and embedded computing.
Threats to Future Innovation
Today's announcement also comes just weeks after Otellini offered a dismal assessment of the U.S. economy, telling a gathering of the Technology Policy Institute in Aspen, Colo., that an anti-business climate in Washington is forcing jobs and investment out of the country.
Unless government policies are altered, Otellini predicted in the Aug. 30 speech: "The next big thing will not be invented here. Jobs will not be created here." In addition, he said, the U.S. legal environment has become so hostile to business that there is likely to be "an inevitable erosion and shift of wealth."
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In its statement Tuesday, however, Intel said that while it generates about 75% of its revenues overseas, it maintains three-fourths of its microprocessor manufacturing in the U.S. "Contrary to conventional wisdom, we can retain a vibrant manufacturing economy here in the United States by focusing on the industries of the future," said Brian Krzanich, senior vice president and general manager of Intel's manufacturing and supply chain operations.
It's a theme that President Barack Obama himself offered during recent tours of domestic automakers' plants in Michigan and Illinois.
Speaking to groups of autoworkers from Chrysler Group, Ford Motor (F) and General Motors, the president said decisions to invest in U.S. plants to build more fuel-efficient vehicles have revived a stagnating industry, saved at least 100,000 jobs and created 55,000 more.
