Construction on Fab 42 at the Intel Ocotillo campus began in 2011 with great fanfare. Once the shell was complete in 2014, Intel mothballed the facility, citing slack demand.

East Valley elected officials applauded Intel’s announcement last week that it will invest $7 billion at its Chandler chip factory known as Fab 42 and create 3,000 full-time Intel jobs. The tech company also said the project would create more than 10,000 jobs in Arizona to run and support the factory.

But long-time Intel observer and industry analyst Jim McGregor, founder of TIRIAS Research in Phoenix, said he isn’t sure where those numbers are coming from.

Fab 42, he explained, is designed to be a “dark fab,” meaning that when it opens in 2020 or 2021, it will be fully automated and will only need a minimal crew of operators and technicians.

“It’s not going to take several thousand people to operate the place,” he said. “We knew Fab 42 would reopen, we just didn’t know when. It’s nothing new.”

Certainly, many hundreds or several thousand construction workers will be needed to build out the factory. The massive project will also be a boon to equipment and materials vendors such as ASML and Applied Materials, McGregor said.

McGregor said Chandler’s good news will probably mean bad news for Intel’s aging Fab 11x plant in New Mexico, which he expects to be shuttered. Intel hasn’t invested in any upgrades there for several years, he added, and the plant is surrounded by homes and other businesses and can’t expand.

Construction of Fab 42 at the Intel Ocotillo campus began in 2011 with great fanfare. President Barack Obama visited the construction site in March 2012.

Once the shell was complete in 2014, however, Intel mothballed the facility, citing slack demand.

Intel CEO Brian Krzanich turned a Feb. 8 visit to the Oval Office with President Donald Trump to announce the $7 billion investment in Fab 42. He outlined the specifics of the plan later that day to employees in an e-mail.

“The 7 nanometer (nm) chips we’re targeting for this factory – the smallest, most powerful and efficient ever – will power state-of-the-art computers, data centers and other high-tech devices,” he said. “They will enable amazing breakthroughs in artificial intelligence, automated driving, medical research and treatment, and the factories of the future.”

Krzanich explained that the new technology requires more factory space per wafer, and that the time was now to pull the trigger on the new factory.

Although Krzanich and Trump are on the same page about expanding U.S. manufacturing jobs and leveling the global playing field, the CEO was critical of the president’s executive order immigration ban.

“When we disagree,” he told employees, “we don’t walk away. We believe that we must be part of the conversation to voice our views on key issues such as immigration, H1B visas and other policies that are essential to innovation.”

– Reach Mike Butler at 480-898-5630 or atmbutler@timespublications.com.

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