Bechtel tapped to build largest private-sector investment ever in Ohio

By Larry StewartNovember 30, 2022

Bechtel will design and build Phase 1 of the Intel Ohio project, a total of 2.5 million square feet of facility, including 600 thousand square feet of cleanrooms. (Photo: Intel Corp.)

With semiconductor fabrication resurging in the U.S., by Intel to build Intel announced it selected Bechtel to build a $20 billion pair of new chip fabs in New Albany, Ohio.

Bechtel will design and build Phase 1 of the Intel Ohio project, a total of 2.5 million square feet of facility, including 600 thousand square feet of cleanrooms. Construction will require as much steel as eight Eiffel Towers and as much concrete as the tallest skyscrapers. Bechtel’s ability to design for rapid advances in technology and deploy best-in-class construction innovation will help Intel realize its ambitions in the next generation of manufacturing.

Economic power of reshoring chips

Building Intel’s two semiconductor fabs will create 7,000 construction jobs and 3,000 full-time chip production jobs.

“Intel has chosen Bechtel to deliver our largest construction project to date, advancing our mission to create a more sustainable, resilient, and geographically balanced supply of silicon,” said Jackie Sturm corporate vice president of Global Supply Chain Operations at Intel Corporation. “Bechtel has decades of world class expertise in complex global construction projects, leveraging a deeply experienced team, critical craft support and robust analytics platforms. Their relentless focus on safety, quality and innovation aligns with Intel key values. We look forward to building the future of U.S. semiconductor manufacturing together.”

Intel’s investment is expected to strengthen economic development in the region with potential to transform it into the “Silicon Heartland” as an entire supply chain is developed to deliver these facilities, including engineers, construction leadership, and craft professionals. Bechtel will partner with the North America’s Building Trades Unions and suppliers to create new construction jobs, and work with local education organizations to implement training programs.

Graphic: Semiconductor Industry Association

The new facilities will produce Intel’s leading-edge chips, boosting production to meet increasing demand for advanced semiconductors. Bechtel’s statement announcing the Intel agreement said, “The CHIPS and Science Act signed into law in August and the Infrastructure Investment and Jobs Act demonstrate the strength of public-private partnerships, as they provide federal resources to support skills training to help build the workforce of the future.”

The legislation includes $52 billion to strengthen semiconductor manufacturing in the United States. Of this, $39 billion is earmarked for manufacturing incentives, $13.2 billion for research and development and workforce training, and $500 million for international information communications technology security and semiconductor supply chain activities.

Manufacturing incentives in the CHIPS Act are expected to motivate building ten to 20 new chip fabs in the U.S. over the coming 10 years. Several companies have already announced major investments in U.S. manufacturing. Taiwan Semiconductor Manufacturing Company (TSMC) committed at least $12 billion to build a semiconductor fabrication plant in Arizona, with production expected to begin in 2024. Texas Instruments broke ground in May on a new semiconductor wafer fab in Sherman, Texas, as part of what could be a $30 billion campus including four fabs supporting as many as 3,000 direct jobs. Intel broke ground on the $20 billion Ohio fab in August. In September, Micron said it would invest up to $100 billion over the next two decades to build a massive semiconductor campus in upstate New York.

The legislation also provides funding to support development of the ecosystem necessary to make chips at profitable volumes – suppliers of materials and equipment, trained workforce and more.

“We would not be here without our political leaders,” Intel CEO Pat Gelsinger said at the Ohio groundbreaking, referring to CHIPS-Act grants and tax credits. “We would not be here without the president and his leadership” on the bipartisan bill.

Chip demand growth continues

The Semiconductor Industry Association’s 2022 State of the U.S. Semiconductor Industry report says U.S. exports of semiconductors totaled $62 billion in 2021, fourth highest among U.S. exports behind airplanes, refined oil, and crude oil.

In total, the U.S. semiconductor industry supported 1.84 million U.S. jobs in 2021, directly employing more than 277,000 domestic workers in R&D, design, manufacturing, and others. For each U.S. worker directly employed by the semiconductor industry, an additional 5.7 jobs are supported in the wider U.S. economy.

The U.S. semiconductor industry also has a significant impact on GDP and income. In 2021, the total impact of the U.S. semiconductor industry on GDP was $276.9 billion. In terms of the impact on income, the industry was responsible for generating $165.1 billion in income in 2021 in the United States. These benefits were distributed widely within other sectors of the U.S. economy. For example, many of the 1.84 million total jobs created by the industry were created in sectors as diverse as construction, financial activities, and leisure and hospitality.

The SAI report said that while the chip shortage and impact of the pandemic began to ease in 2022, “increased demand for semiconductors is expected to persist over the next decade. The global semiconductor industry plans to match market growth through record levels of investment in manufacturing and R&D. Global fab capacity is expected to grow by 30% from 2020 to the end of 2022 and is forecast to grow in 2023.”

Global chip sales grew more than 26% in 2021, and the Semiconductor Industry Assoc. says increased demand is expected to persist over the next decade. (Graphic: Semiconductor Industry Association)
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