Intel Corp. on Monday said it has been awarded a Pentagon contract for foundry that's part of a program to bolster semiconductor manufacturing in the United States.
The Santa Clara-based chip giant said in a release that it will join International Business Machines Corp., Synopsys Inc., Cadence Design Systems Inc. and others in the RAMP-C program — short for Rapid Assured Microelectronics Prototypes-Commercial.
It's a program designed to make sure the U.S. chip-building ecosystem is adequate to meet the long-term needs of the government and defense department. The Biden Administration's defense budget for 2022 includes a request for $2.3 billion for microelectronics efforts deemed critical to long-term national security amid a global semiconductor shortage.
About three quarters of the world's chip manufacturing capacity today is in China, Japan, South Korea and Taiwan, led by Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Company (TSMC). Nearly all of the world's advanced semiconductor manufacturing capacity is in South Korea and Taiwan.
The contract announced this week will support Intel Foundry Services, a unit the company launched as a stand-alone division this year to produce both its own chips and those which use other architectures. The company plans to spend about $20 billion to build out two new factories at its Ocotillo Campus in Chandler — its largest site in the world — for this effort, with planning and construction activities coming later this year.
When complete, the company's workforce in Chandler is expected to grow from the current 12,000 to 15,000.
Intel is working to add at least 700 workers for its Rio Rancho plant under a $3.5 billion expansion effort. In a July 27 email, spokeswoman Linda Qian wrote in an email that Intel has "started hiring" for the expansion.
As part of the project, the company is expected to spend $550 million on construction and infrastructure, according to the New Mexico Economic Development Department. The company plans to update the site for production of advanced packaging technologies.
Intel employs more than 1,800 people in New Mexico, according to its a recent annual update on its operations here. The average annual total compensation for Intel's New Mexico employees stood at more than $145,000 as of the end of 2020, including salary, benefits and bonuses, according to the report.
In addition to its Rio Rancho facility and the Arizona fab sites, Intel produces semiconductor chips at U.S. facilities in Hillsboro, Oregon and Hudson, Massachusetts. The company also has manufacturing facilities in Israel and China.
Intel was surpassed last year by Santa Clara-based Nvidia Corp as the nation’s largest semiconductor company by market value. South Korea’s Samsung Electronics Co. became the world’s top chip maker by revenue in the second quarter.
"Intel is the sole American company both designing and manufacturing logic semiconductors at the leading edge of technology," Intel CEO Pat Gelsinger said in Monday's announcement. "When we launched Intel Foundry Services earlier this year, we were excited to have the opportunity to make our capabilities available to a wider range of partners, including in the U.S. government, and it is great to see that potential being fulfilled through programs like RAMP-C."
