Intel to Invest at Least $20 Billion in New Chip Factories in Ohio

Intel has selected Ohio for a new chip manufacturing complex that would cost at least $20 billion, ramping up an effort to increase U.S. production of computer chips as users grapple with a lingering shortage of the vital components.

Intel said on Friday that the new site near Columbus would initially have two chip factories and would directly employ 3,000 people, while creating 7,000 short-term construction jobs and tens of thousands of permanent positions at suppliers and partners.

Patrick Gelsinger, who became Intel’s chief executive last year, has rapidly increased the company’s investments in manufacturing to help reduce U.S. reliance on foreign chip makers while lobbying Congress to pass incentives aimed at increasing domestic chip production. He said that Intel hoped to invest as much as $100 billion over a decade to build up to eight factories on the Ohio campus, linking the scope and speed of that expansion to expected federal grants if Congress approves a spending package known as the CHIPS Act.

“We are putting our chips on the table,” Mr. Gelsinger said at White House event on Friday. “But this project will be bigger and faster with the CHIPS Act.”

President Biden, who has actively pushed for the legislation, argued that the CHIPS Act and U.S. investments by Intel and other chip makers were crucial for the economy, national security and economic competition.

“China is doing everything it can to take over the global market,” he said.

Intel’s move has wide-ranging geopolitical implications, as well as significance for supply chains. Chips, which act as the brains of computers and many other devices, are largely manufactured in Taiwan, which China has expressed territorial claims toward. During the pandemic, they have also been in short supply because of overwhelming demand and coronavirus-related disruptions to manufacturing and labor supply, raising questions about how to ensure a consistent chip pipeline.

The move is Intel’s first to a new state for manufacturing in more than 40 years. The company, based in Silicon Valley, has U.S. factories in Oregon, New Mexico and Arizona. Last March, Mr. Gelsinger chose an existing complex near Phoenix for a $20 billion expansion, which is now underway.

But Mr. Gelsinger had also asserted that a new location was needed to provide additional talent, water, electrical power and other resources for the complex process of making chips. Intel has combed the country for sites, prompting states to compete for one of the biggest economic development prizes in recent memory.

The site chosen for the new plant, in New Albany, a suburb east of Columbus, is in an area known for inexpensive land and housing. Nearby Ohio State University is a major source of graduates with engineering degrees whom Intel could recruit. Columbus is also centrally located for receiving supplies and for shipping finished chips.

Construction of the first two factories is expected to begin later this year with production to start by 2025, Intel said. The site, which Mr. Gelsinger called a catalyst for a new “Silicon Heartland,” is more than 1,000 acres and is expected to be the largest economic development project…