Intel plans to invest $20 billion to build a new chip-production facility in Ohio amid continuing global shortages. Wall Street Journal editor Alex Frangos tells WSJ What’s News host Luke Vargas this comes on top of more than $100 billion in chip-making investments which Intel has already announced in the past year.
This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Luke Vargas: Intel is planning to invest at least $20 billion in a new chip making facility in Ohio. That's on top of the more than $100 billion in chip making investments it's already announced in the last year. And it comes amid a global chip shortage, which has amplified the need for more or manufacturing. I'm Luke Vargas with The Wall Street Journal. And for more, we're joined by Markets Editor, Alex Frangos. Hi, Alex.
Alex Frangos: Hey, good morning.
Luke Vargas: First off, what do we know about these plans in Ohio?
Alex Frangos: Well, they're big. It's up to $20 billion in Columbus, Ohio. 3,000 jobs. And it's part of a much bigger investment plan by Intel and by basically chip makers around the world to boost the supply of these chips that are in just about everything and for which there is a huge shortage right now, so it's a pretty big deal.
Luke Vargas: On that global chip shortage, how significant are investments like these for the industry and for Intel's supply chain right now?
Alex Frangos: Well, it's important, but honestly, $20 billion is not that much. There's over a couple hundred billion dollars worth of investment going on around the world from big chip makers, like Samsung and TSMC and NVIDIA and Intel and others to address this problem, which is the pandemic hit and there was a huge amount of demand for goods and there weren't enough chips. And it turns out that they weren't investing enough even before the pandemic, and so now they're making up for lost time.
Luke Vargas: Alex, you mentioned how Intel has made several larger chip making announcements over the last year. Could you tell me a little bit more about that?
Alex Frangos: Sure. I mean, well, they've announced a couple of different big chip plants, including in Arizona and other places. And part of this is Intel has fallen behind. I mean, we used to think of Intel as synonymous with chips. It was the market leader. It's since been eclipsed in terms of market cap, really kind of cornered the market in high end fast chips that are used for video games and other things. And Samsung in Korea generates more revenue than Intel now from its chips business. So this is really a big investment by Intel to try to catch up and retake the lead.
Luke Vargas: And bigger picture. Are there any signs the global chip crunch could finally be letting up a little bit?
Alex Frangos: It's not as bad now as it was last year, but these things go into everything, cars especially, those are basically computers on wheels, your refrigerator, your smartphone,. And there's been huge demand for those things coming out of the pandemic, so industry people think that there will continue to be a shortage this year and even into next.
Luke Vargas: That was Markets Editor, Alex Frangos. Alex, thanks for being with us.
Alex Frangos: Great to be here.
Luke Vargas: To hear more stories about business and politics from The Wall Street Journal, ask your Google assistant to play WSJ What's News podcast.