Intel CEO Pat Gelsinger appeared on 60 Minutes tonight to discuss the ongoing chip shortages in a wide-ranging interview with CBS News correspondent Leslie Stahl. Stahl noted during the program that Intel would announce a $3.5 billion upgrade to its Rio Rancho facility in New Mexico this week. Intel also posted a press release during the program announcing a live news conference tomorrow at 9 am PT about the investment (the press release doesn’t include the $3.5 billion figure).
The pending Rio Rancho announcement comes on the heels of Intel’s transition to its new IDM 2.0 model that will entail producing custom chips for third parties while it also vastly expands its own production capacity. Intel has already announced a $20 billion investment for two new fabs in Arizona, and it is also seeking subsidies from the US government for further US-based expansion. Intel recently confirmed a $10 billion investment in its Israel facilities, and is also reportedly seeking ~$10 billion in funding from the EU for a new fab in Europe.
Intel’s spending spree comes as its rival TSMC has announced its own $100 billion investment in fabs and R&D over the next three years.
Intel’s Rio Rancho investment could include funding for Optane (also called 3D XPoint) production. Intel’s sole source of the exotic tech, Micron, recently announced that it would cease production at the end of 2021. Micron plans to put its 3D XPoint fab in Lehi, Utah, up for sale at the end of the year after it exits the business.
Among other duties, Intel’s Rio Rancho facility is currently used as an R&D and development center for Optane media. Intel originally co-developed the technology in partnership with Micron and owns the associated IP, meaning Intel can produce the media, but the Rio Rancho fab currently isn’t used for volume production.
Optane media is a new type of memory that melds the speed and endurance of DRAM with the persistence of data storage devices, but it ran into quite a few hurdles in its path to market. Additionally, sluggish uptake of consumer-class storage devices based on the speedy material led Intel to kill off the entire range of Optane products for desktop PCs earlier this year. However, Intel has told Tom’s Hardware that it intends to continue to supply both the Optane storage drives and persistent memory DIMMs for its enterprise customers.
All of this means that Intel has to either procure Micron’s 3D XPoint fab or spin up its own production lines. Given that Rio Rancho is the site of its Optane development efforts, it wouldn’t be surprising to see Intel establish its own Optane production lines there. Intel might also be interested in purchasing Micron’s soon-to-be-retired fab tools from the Lehi, Utah facility so it can quickly ramp production.
We’ll learn more details about the Rio Rancho investment tomorrow during Intel’s press conference. Keyvan Esfarjani, Intel senior vice president and general manager of Manufacturing and Operations, will join New Mexico Gov. Michelle Lujan Grisham and several US Senators for the announcement at 9 am PT. We’ll update as we learn more.