A trucking industry group is applauding news that chip maker Intel Corp. will build a $20 billion semiconductor manufacturing plant in Ohio, saying the facility could help the transportation sector to escape from parts shortages that have stopped automakers from completing much-needed trucks in recent months.
Analysts have pointed to shortages of both truck drivers and automotive parts for contributing to a constrained freight market that has driven up transportation prices for shippers and slowed efforts by maritime port operators to clear historic backlogs of shipping containers. That cycle has persisted for so long in part because many of the missing car parts are imported goods that have been delayed in entering the country in part by the very logistics delays they are intended to clear.
Intel’s move could help break that logjam by increasing the domestic supply of computer chips instead of relying on overseas sources like the “Big Four” semiconductor sources of China, Japan, South Korea, and Taiwan, industry figures say.
“This is how we climb out from these Covid-induced shortages – by investing in our nation’s supply chain,” American Trucking Associations (ATA) President and CEO Chris Spear said in a release. “The global chip shortage is having a heavy impact on the trucking industry and our ability to meet the economy’s growing freight demands. Thousands of unfinished heavy-duty trucks sit parked in lots across the country waiting for chip-enabled components, and tens of thousands of more existing trucks are sidelined waiting for repair parts. Truckers know how to get a job done better than anyone, but it’s challenging to move more freight with fewer trucks.”
The decision by Santa Clara, California-based Intel to build its plant in Licking County, just outside of Columbus, will not only create 7,000 construction jobs during the project and 3,000 technology jobs once production comes online by the end of 2025, but it will also realign a key part of the automotive supply chain, according to a statement by the Biden Administration. While U.S. was once a leader in the production of semiconductor chips, the country today accounts for just 12% of global production, the White House said.
“This investment is a big win for Intel, for American manufacturing, and for American consumers who can look forward to lower prices as we bring home production of the semiconductors that keep our economy running,” U.S. Secretary of Commerce Gina Raimondo said in a release. “From his first day in office, President Biden has recognized that if we want to compete globally, we need to invest domestically. That investment begins with revitalizing our manufacturing economy, strengthening American supply chains, and bringing good-paying jobs back from overseas.”
According to Intel, the 1,000-acre facility is now designed to include two chip factories—also known as fabrication plants or “fabs”—and could eventually host eight such plants. As it stands, the project becomes the largest single private-sector investment in Ohio history, and if it reaches 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.
“Today’s investment marks another significant way Intel is leading the effort to restore U.S. semiconductor manufacturing leadership,” Intel CEO Pat Gelsinger said in a release. “Intel’s actions will help build a more resilient supply chain and ensure reliable access to advanced semiconductors for years to come. Intel is bringing leading capability and capacity back to the United States to strengthen the global semiconductor industry. 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.”
This is welcome news. The global chip shortage is having a heavy impact on freight capacity, with tens of thousands of trucks sidelined waiting on chip-enabled parts. It's very challenging to move more freight with fewer trucks. https://t.co/bMZmROw0pA— American Trucking (@TRUCKINGdotORG) January 21, 2022
Announcing new investments in Ohio to build a more balanced supply chain and create a new epicenter for advanced chipmaking that will bolster Intel’s domestic lab-to-fab pipeline and strengthen Ohio’s leadership in research and high tech. #IntelOhio— Intel (@intel) January 21, 2022