Wednesday, February 11, 2009

Intel: Rebuilding Again

Constant innovation is the rule for the semiconductor industry. In keeping with this rule, yesterday Intel Corporation announced plans to spend $7 billion remodeling semiconductor fabrication plants in Rio Rancho and in Oregon and Arizona. "Remodeling" is hardly the word. The concept is more like raising the building, taking out all the old equipment and installing new, more expensive stuff. Intel rebuilds its manufacturing facilities every few years. The most recent project in Rio Rancho was in 2007.
Intel will spend about $2.5 billion at its Rio Rancho facility. The result of the projects will be introduction of the industry’s first 32-nanometer computer architecture. In announcing the projects, Intel said, “The technology used in (the) manufacturing process builds chip circuitry 32nm (32/billionth of a meter or about 1/millionth of an inch) across – incredibly small, atomic level structures.” The resulting chips will be faster, smaller and use less energy. That is Moore's Law in action—more capacity in the chip and lower price.
In Rio Rancho, the project will require more than 1,000 construction workers. Intel employs more than 3,000 in Rio Rancho.
Some other Rio Rancho details were overlooked in news reports, perhaps due to lack of institutional memory.
The chips with the 32-nanometer wide circuits go on silicon wafers that are 300 millimeters in diameter or nearly ten inches, if I've correctly done the math. In 1983, I got a six-inch wafer from Intel. It is a framed and incredibly antique trophy on the wall.
This new project will bring to about $15 billion the amount of money Intel will have spent in Rio Rancho since 1995. Intel has one "fab" or fabrication facility in Rio Rancho. There used to be several.
Intel still has contract workers on site in numbers approximately equal to Intel's employment. Thus, the Rio Rancho site is responsible for about 6,000 jobs, half of which are paid with Intel checks.
This coming rebuilding of the Rio Rancho plant was done because of Intel's happiness with the metro Albuquerque labor force. That was the same reason Intel came to town in first place.

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