Intel: $3.5B investment is critical to microchip future

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Intel Senior Vice President for Manufacturing and Operations Keyvan Esfarjani announces the company's plans to invest $3.5 billion in its New Mexico operations during a news conference Monday, May 3, 2021 in Rio Rancho, New Mexico. The company will modernize its Rio Rancho plant so can begin producing an advanced packaging system that will allow for stacking tiles to make better performing and more capable microchips. (AP Photo/Susan Montoya Bryan)

RIO RANCHO, N.M. – Intel will be investing $3.5 billion in its New Mexico plant to manufacture what executives said Monday will fuel “a new era of innovation” and advanced computing as demands increase for the tiny microchips used in nearly all modern devices.

Intel executives were joined by Gov. Michelle Lujan Grisham and other politicians at the plant in the Albuquerque suburb of Rio Rancho as they shared details of Intel's global strategy as it looks to reclaim the top spot in the semiconductor sector.

Multibillion-dollar expansions also are underway at the company’s sites in Arizona, Oregon, Ireland and Israel.

Almost every aspect of life today depends on technology, and the demand for more manufacturing and advanced packaging systems for microchips is more critical than ever as more people are working from home and as many parts of education and communication have gone virtual, said Keyvan Esfarjani, the company's senior vice president for manufacturing and operations.

“The world is continuing to count more and more on advanced semiconductor technologies," he said, “and Intel is absolutely the enabler.”

The Santa Clara, California, company recently reported first-quarter earnings of $3.36 billion, topping expectations. Since the beginning of the year, Intel shares have increased by about 26% following a downturn last year as it reported a delay in development of its next-generation manufacturing process for building faster and more powerful chips.

Most of the world's chip manufacturing happens in Asia. Intel is the only company currently producing in the U.S.

President Joe Biden's infrastructure package proposed spending $50 billion to boost the semiconductor industry in the U.S., but New Mexico's elected leaders said nearly $20 million in homegrown tax incentives and economic development funding were key to landing Intel's latest investment.