Intel Opens Fab 9 in New Mexico

Rhea-AI Summary

Intel celebrates the opening of Fab 9, its cutting-edge factory in Rio Rancho, New Mexico, part of a $3.5 billion investment for advanced semiconductor packaging technologies. The milestone marks Intel's first high-volume semiconductor operations in the US, producing world-class packaging solutions at scale, fueling the next era of innovation in advanced packaging technologies, and contributing to the state's economic growth.

Insights

Market Research Analyst

The opening of Intel's Fab 9 is a strategic move that significantly bolsters the semiconductor industry's supply chain within the United States. By localizing advanced semiconductor packaging technology production, Intel is not only mitigating risks associated with geopolitical tensions and international supply disruptions but also capitalizing on the growing demand for cutting-edge chip technologies.

The investment in 3D packaging technology, such as Foveros, positions Intel to lead in the heterogeneous computing era, which is characterized by the integration of multiple 'chiplets' to enhance performance and efficiency. This is a crucial development as the industry seeks to navigate the slowing pace of Moore's Law, which has historically predicted the doubling of transistors on a chip every two years.

From a market perspective, this operational expansion may improve Intel's competitive edge against global rivals, potentially influencing the company's market share and investor confidence. The creation of thousands of jobs also has a positive economic impact on the local New Mexico economy, which could foster investor interest in regional development projects.

Financial Analyst

Intel's $3.5 billion investment in Fab 9 is a significant capital expenditure that reflects a long-term strategic vision. The investment is poised to enhance Intel's gross margins over time due to increased efficiency and potentially lower production costs associated with in-house advanced packaging capabilities.

Investors will likely monitor the return on investment (ROI) from Fab 9, as it is indicative of Intel's ability to execute on its capital-intensive projects. The focus on advanced packaging technologies, such as Foveros and EMIB, suggests Intel is aiming to secure a technological advantage that could translate into higher average selling prices (ASPs) and stronger demand for its products.

It is important to note that the semiconductor industry is cyclical and the timing of such an investment could be critical. Should the market enter a downturn, Intel could face challenges in recouping this investment in the short term. However, the long-term outlook remains positive given the increasing complexity and necessity of advanced semiconductors in various industries.

Technology Analyst

Intel's investment in 3D advanced packaging technologies like Foveros represents a paradigm shift in semiconductor design and manufacturing. Foveros allows for the vertical stacking of compute tiles, which is a departure from traditional planar chip layouts. This technology is critical for overcoming the limitations of Moore's Law by enabling more transistors in a given footprint without shrinking the transistor size, which is becoming increasingly difficult and expensive.

The ability to mix and match compute tiles for cost and power efficiency is a significant value proposition that could see wide adoption in various computing applications, from mobile devices to data centers. This flexibility is particularly relevant as the industry trends towards application-specific integrated circuits (ASICs) and systems on a chip (SoCs).

Intel's positioning as the only U.S. factory producing these advanced packaging solutions at scale could also attract foundry customers seeking to diversify their supply chains and reduce dependence on Asian manufacturing hubs. This could lead to new revenue streams for Intel as a foundry service provider, beyond its traditional role as a chipmaker.

Opening marks a milestone for high-volume manufacturing of 3D advanced packaging technologies.

RIO RANCHO, N.M.--(BUSINESS WIRE)-- What’s New: Today, Intel celebrated the opening of Fab 9, its cutting-edge factory in Rio Rancho, New Mexico. The milestone is part of Intel's previously announced $3.5 billion investment to equip its New Mexico operations for the manufacturing of advanced semiconductor packaging technologies, including Intel’s breakthrough 3D packaging technology, Foveros, which offers flexible options for combining multiple chips that are optimized for power, performance and cost.

A drone photo shows Intel's new Fab 9 in Rio Rancho, New Mexico, in January 2024. Fab 9 is part of Intel's previously announced $3.5 billion investment to equip its New Mexico operations for the manufacturing of advanced semiconductor packaging technologies. (Credit: Intel Corporation)

“Today, we celebrate the opening of Intel’s first high-volume semiconductor operations and the only U.S. factory producing the world’s most advanced packaging solutions at scale. This cutting-edge technology sets Intel apart and gives our customers real advantages in performance, form factor and flexibility in design applications, all within a resilient supply chain. Congratulations to the New Mexico team, the entire Intel family, our suppliers, and contractor partners who collaborate and relentlessly push the boundaries of packaging innovation.”
– Keyvan Esfarjani, Intel executive vice president and chief global operations officer

Why It Matters: Intel’s global factory network is a competitive advantage that enables product optimization, improved economies of scale and supply chain resilience. The Fab 9 and Fab 11x facilities in Rio Rancho represent the first operational site for mass production of Intel’s 3D advanced packaging technology. It is also Intel's first co-located high-volume advanced packaging site, marking an end-to-end manufacturing process that creates a more efficient supply chain from demand to final product.

Fab 9 will help fuel the next era of Intel’s innovation in advanced packaging technologies. As the semiconductor industry moves into the heterogeneous era that uses multiple “chiplets” in a package, advanced packaging technologies, such as Foveros and EMIB (embedded multi-die interconnect bridge), offer a faster and more cost-efficient path toward achieving 1 trillion transistors on a chip and extending Moore’s Law beyond 2030.

Foveros, Intel’s 3D advanced packaging technology, is a first-of-its-kind solution that enables the building of processors with compute tiles stacked vertically, rather than side-by-side. It also allows Intel and foundry customers to mix and match compute tiles to optimize cost and power efficiency.

"This investment by Intel underscores New Mexico’s continued dedication to bring manufacturing back home to America," said Gov. Michelle Lujan Grisham. "Intel continues to play a key role in the state’s technology landscape and strengthen our workforce, supporting thousands of New Mexico families.”

The $3.5 billion investment in Rio Rancho has created hundreds of high-tech Intel jobs, more than 3,000 construction jobs and an additional 3,500 jobs across the state.

About Intel’s Commitment to Corporate Responsibility: Intel remains committed to minimizing its environmental footprint as it expands its operations to support the growing demand for semiconductors. Fab 9 is on track to meet its goal to recycle at least 90% of construction waste, exceeding the goal most recently in November and December 2023.

Intel also purchases renewable electricity to meet 100% of its New Mexico electricity use. The company has also funded three nonprofit-led water restoration projects benefiting New Mexico watersheds that are estimated to restore more than 100 million gallons of water annually. These projects helped Intel return and restored more than 100% of its New Mexico freshwater to the community and local watersheds in 2022. It also conserved more than 500 million gallons of water at its New Mexico site, the equivalent annual water use of more than 4,500 U.S. homes¹.

About Intel New Mexico: Intel’s presence in Rio Rancho dates to 1980, with a cumulative investment of more than $16 billion in capital. Intel's commitment goes beyond business operations; it extends into the community. Over the past five years, Intel employees volunteered more than 65,000 hours in New Mexico. Additionally, Intel, the Intel Foundation and Intel employees have donated more than $6.5 million to support local nonprofits and schools since 2018.

Intel actively engages with the Rio Rancho community through volunteering, collaborations with nonprofits and investments in education. For example, Intel has helped establish endowment scholarships among five New Mexico colleges and universities. These endowments build on Intel’s ongoing work to support workforce development and education in New Mexico, including internship programs, local associate degree programs, investments in STEAM education and others.

More Context: Paving Inclusive Pathways to the Technology Industry in New Mexico (Fact Sheet) | Building a Sustainable Future in New Mexico (Fact Sheet) | Intel Opens Fab 9 in Rio Rancho, New Mexico (Quote Sheet) | Intel Advanced Packaging in New Mexico’s Fab 9, Manufacturing in Fab 11X (B-Roll Video) | Fab 9: High-Volume Manufacturing of 3D Advanced Packaging Technologies in New Mexico (YouTube Video)

About Intel

Intel (Nasdaq: INTC) is an industry leader, creating world-changing technology that enables global progress and enriches lives. Inspired by Moore’s Law, we continuously work to advance the design and manufacturing of semiconductors to help address our customers’ greatest challenges. By embedding intelligence in the cloud, network, edge and every kind of computing device, we unleash the potential of data to transform business and society for the better. To learn more about Intel’s innovations, go to newsroom.intel.com and intel.com.

¹ https://www.epa.gov/watersense/how-we-use-water

© Intel Corporation. Intel, the Intel logo and other Intel marks are trademarks of Intel Corporation or its subsidiaries. Other names and brands may be claimed as the property of others.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240124070327/en/

Kiana Cacchione

1-602-989-0640

kiana.cacchione@intel.com

Source: Intel

FAQ

What is the significance of the opening of Fab 9 in Rio Rancho, New Mexico for Intel (INTC)?

The opening of Fab 9 marks Intel's first high-volume semiconductor operations in the US, producing advanced packaging technologies at scale and fueling the next era of innovation.

What are the advanced semiconductor packaging technologies being manufactured at Fab 9?

Fab 9 will manufacture Intel's breakthrough 3D packaging technology, Foveros, which offers flexible options for combining multiple chips optimized for power, performance, and cost.

How does the opening of Fab 9 contribute to the semiconductor industry's future?

Fab 9 will help fuel the next era of Intel’s innovation in advanced packaging technologies, offering a faster and more cost-efficient path toward achieving 1 trillion transistors on a chip and extending Moore’s Law beyond 2030.

What is the economic impact of Intel's $3.5 billion investment in Rio Rancho?

The investment has created hundreds of high-tech Intel jobs, more than 3,000 construction jobs, and an additional 3,500 jobs across the state, contributing to economic growth.

What is Intel's 3D advanced packaging technology, Foveros?

Foveros is a first-of-its-kind solution that enables the building of processors with compute tiles stacked vertically, allowing Intel and foundry customers to mix and match compute tiles to optimize cost and power efficiency.