Intel Plans to Decentralize Semiconductor and Chip Manufacturing

Tech company Intel announced an US$80 billion investment to decentralize semiconductor and chip manufacturing. Most of the company’s production is done in Asia and the rest is done between the US and Europe. In this new chapter for semiconductors, Mexico takes a key role, given that the country hosts two of the most important processes for the manufacturing of chips: design and validation. 

Nowadays, 80 percent of Intel’s semiconductor or chip manufacturing is done in Asia. After the COVID-19 pandemic, however, having centralized production has resulted in a worldwide problem given the supply chain crisis. Full recovery of specific sectors, especially automotive, has not been possible due to the ongoing issues including these shortages and other supply chain disruptions, as mentioned by Miguel Elizalde, Executive President, ANPACT. 

The decentralization announcement came from the company’s CEO, Santiago Cardona, during Intel Mexico’s 30-year anniversary. “It is important to have a diversified supply chain. Intel is making great efforts to diversify it. We want a much more balanced semiconductor supply chain. I am sure that everyone has stories of how in the last two years they have experienced something around the scarcity of semiconductors; that is why this effort is important,” he said. The move is essential given that it is estimated that the semiconductor market will grow at least 5 percent each year between now and 2030 as these products are key components for different industries to continue with their innovation efforts. “We are investing in the US and Europe. In the US, our targets are New Mexico and, lately, Ohio. In Europe, we are eyeing Italy, Poland, Germany, Ireland, Spain and France, all in order to have a more reliable and efficient supply chain for years to come,” he added. 

Mexico comes into the equation given the brand’s presence in the country. Intel has hired over 1,900 people and left an economic spill of more than US$1 billion, with plans to invest approximately US$8 million throughout 2022 to strengthen capacities. The company is also estimating to hire 200 highly specialized engineers to make the process of design and validation much more efficient. “The effort to continue strengthening the capabilities of our Design Center in Guadalajara goes hand in hand with the strategy of strengthening the global semiconductor supply chain,” said Ricardo López, Director of Corporate Sales and Government, Intel Mexico, according to Forbes.