Intel (INTC.US) has made new progress in expanding its US fab! New Arizona plant to be put into operation in 2028 Surge in demand for AI chips boosts confidence in expanding production

The Zhitong Finance App learned that Intel (INTC.US) announced on Wednesday that its US fab expansion plan, which had been postponed several times before, has made significant progress. The new plant in Arizona has entered the critical equipment installation phase, and construction of the Ohio chip manufacturing base is also underway. As demand for artificial intelligence (AI) data center processors grows rapidly, Intel is once again speeding up the construction of manufacturing capacity in the US to enhance advanced chip manufacturing capabilities and promote the development of the foundry business.

Intel Vice President Naga Chandrasekaran said in an article published on the company's official website that the Fab 62 fab plant near Phoenix, Arizona is currently installing production equipment, which is a key step before the plant is officially put into operation. Intel expects the plant to commence operations in early 2028.

At the same time, Intel's chip manufacturing site in New Albany, Ohio has also made progress, and has completed the installation of the first large roof truss, marking that this long-delayed project is moving forward again.

Intel is currently constructing two advanced fabs at the Ocotillo campus south of Phoenix. Among them, Fab 52 has already been put into operation, and Fab 62 is next to it. It is about to complete plant construction and enter the production equipment installation stage. The company also has other local factories for the production of more mature process chips.

For chip makers, installation of production equipment is usually the most expensive part of the fab construction process. The cost of purchasing a single unit of some advanced semiconductor manufacturing equipment can reach hundreds of millions of dollars. Therefore, from completing plant construction to installing equipment, it often means that companies need to invest a lot of capital.

Intel is now promoting the installation of Fab 62 equipment, indicating that the company is preparing to expand its chip manufacturing capacity in the future.

This development also reflects changes in Intel's capital expenditure strategy under CEO Chen Liwu. Since taking over as CEO in March 2025, Chen Liwu has emphasized controlling capital expenditure and avoiding excessive investment when market demand is unclear. He said earlier that large-scale construction projects, including the Ohio fab, will only continue to advance if the company is convinced that it has sufficient order support in the future. As projects in Arizona and Ohio progress again, the market may see this as a sign of Intel's growing confidence in future chip demand.

Intel previously vigorously promoted the capacity building of advanced semiconductor manufacturing in the US under the leadership of former CEO Pat Gelsinger, hoping to use the expansion of local fabs to re-establish the company's leading position in the global chip manufacturing field. Among them, the Ohio project was once planned as the world's largest chip manufacturing base, and is regarded as an important symbol of the revival of Intel's manufacturing business. In 2022, former US President Joe Biden also visited the project to create momentum for its construction plan.

However, due to Intel's gradual loss of leadership in advanced process technology over the past ten years and failure to attract enough external foundry customers, the company's huge production expansion plans lacked sufficient order support, and many projects were delayed for a long time as a result.

In the semiconductor industry, companies usually first build the main fab building, wait until customer needs and capacity utilization prospects are more clear, and then purchase and install expensive manufacturing equipment to reduce the risk of idle production capacity and capital investment.

Although Intel has yet to announce the acquisition of a large number of representative external foundry customers, demand for its own chip business is improving markedly. It is particularly noteworthy that with the rapid spread of AI services, the demand for server processors in data centers continues to grow, and orders for Intel-related products have increased dramatically. Currently, the company is even facing a situation where it is difficult to fully meet customer needs.

This change is providing more direct commercial support for Intel to expand manufacturing capacity, and is also expected to ease market concerns about the return on investment in its fabs.

In terms of capital expenditure, Intel said in July this year that it will increase investment in new plant construction and production equipment. It is estimated that the relevant budget for 2026 will reach about 20 billion US dollars, which is higher than previously anticipated. The company also anticipates a further significant increase in capital expenditure in 2027.

However, there is still a clear gap in the scale of Intel's investment compared to the world's leading semiconductor manufacturers.

According to Wall Street forecasts, the capital expenditure of TSM.US (TSM.US), the leading global foundry company, is expected to be around 60 billion US dollars, which is significantly higher than Intel. South Korea's Samsung Electronics is also investing far more money than Intel in semiconductor manufacturing. This means that although Intel is speeding up advanced manufacturing capacity building, to regain its leading position in global semiconductor manufacturing competition, it still needs to continue to invest a large amount of capital and make substantial progress in advanced process technology, customer expansion, and capacity utilization.