Intel: $3.5B investment is critical to microchip future

Monday, May 3, 2021 | Susan Montoya Bryan, Associated Press


Intel Senior Vice President for Manufacturing and Operations Keyvan Esfarjani announces the company's plans to invest $3.5 billion in its New Mexico operations during a news conference Monday, May 3, 2021 in Rio Rancho, New Mexico. The company will modernize its Rio Rancho plant so can begin producing an advanced packaging system that will allow for stacking tiles to make better performing and more capable microchips. (AP Photo/Susan Montoya Bryan)

RIO RANCHO, N.M. (AP) — Intel will be investing $3.5 billion in its New Mexico plant to manufacture what executives said Monday will fuel “a new era of innovation” and advanced computing as demands increase for the tiny microchips used in nearly all modern devices.

Intel executives were joined by Gov. Michelle Lujan Grisham and other politicians at the plant in the Albuquerque suburb of Rio Rancho as they shared details of Intel's global strategy as it looks to reclaim the top spot in the semiconductor sector.

Multibillion-dollar expansions also are underway at the company’s sites in Arizona, Oregon, Ireland and Israel.

Almost every aspect of life today depends on technology, and the demand for more manufacturing and advanced packaging systems for microchips is more critical than ever as more people are working from home and as many parts of education and communication have gone virtual, said Keyvan Esfarjani, the company's senior vice president for manufacturing and operations.

“The world is continuing to count more and more on advanced semiconductor technologies," he said, “and Intel is absolutely the enabler.”

The Santa Clara, California, company recently reported first-quarter earnings of $3.36 billion, topping expectations. Since the beginning of the year, Intel shares have increased by about 26% following a downturn last year as it reported a delay in development of its next-generation manufacturing process for building faster and more powerful chips.

Most of the world's chip manufacturing happens in Asia. Intel is the only company currently producing in the U.S.

President Joe Biden's infrastructure package proposed spending $50 billion to boost the semiconductor industry in the U.S., but New Mexico's elected leaders said nearly $20 million in homegrown tax incentives and economic development funding were key to landing Intel's latest investment.

The incentives include a recently approved program for using a percentage of gross-receipts tax and compensating revenue from the construction phase of projects to help businesses with land, building and infrastructure costs. The governor touted the bipartisan measure as a tool that will make New Mexico more competitive.

“This notion that we don’t ever do it right and that the other states around us are doing it better are not true,” Lujan Grisham said. “Here’s an example where we’re absolutely competitive at the right time and in the right ways without having to move too far in terms of an incentive.”

Intel's plan in New Mexico marks one of the largest single investments by a private company in the state. The governor said the incentives amount to a fraction of what Intel will be investing overall and of indirect jobs and revenue that will come from the project. Intel already employs about 1,800 workers at the site and has an annual economic impact of about $1.2 billion.

The Rio Rancho plant will be modernized to focus on what the company bills as an advanced packaging system for stacking its chips that will allow for better performance and more capabilities for artificial intelligence, graphics or whatever applications customers are working on, Esfarjani said.

The project will result in 700 plant jobs, 1,000 construction jobs and an estimated 3,500 related jobs in the surrounding community. Local officials said the investment will serve as a shot in the arm as they look to rebound from the economic sting of the pandemic.

Intel first came to New Mexico in 1980. The plant has seen several revisions over the years as the company has invested more than $16 billion in its manufacturing capabilities.

“This is going to become a very integral parts of our production. It’s going to become an enabler for advanced packaging," Esfarjani said. “So in my estimation we’re all in, there’s no looking back. We’re absolutely committed to making this a huge success and will be counting on this operation for decades to come.”

Featured Article: Diversification For Individual Investors



7 Stocks to Support Your New Year’s Resolutions

After a year like 2020, many Americans figure that just getting to 2021 was enough. But for many people, the start of a new year still means making resolutions. And while many Americans are still waking up to Groundhog’s Day, there is hope that things will look dramatically different in September than they do right now.

Some of the most popular resolutions include losing weight, exercising more, or taking steps to get our life and/or business more organized. And many pure-play companies lean into these trends and are doing well.

As an alternative to this, you can also invest in companies that are not pure plays but can still benefit from consumers looking to start fresh. Owning these stocks helps you manage your risk. If the trend holds, you can ride the wave. On the other hand, if the wave turns into a ripple, the stocks have other catalysts to get them through.

In this special presentation, we’ll take a look at both of these categories. We’ve got several pure-play companies that let investors buy stocks in companies benefiting from these trends. We’ll also give you a few stocks that fall in the latter category.

These are stocks that you might buy at any time and for many reasons. However, they present excellent buys as the new year begins.

View the "7 Stocks to Support Your New Year’s Resolutions".


Free Email Newsletter

Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:

MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected]m | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security. Learn more.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research. As a bonus to opt-ing into our email newsletters, you will also get a free subscription to the Liberty Through Wealth e-newsletter. You can opt out at any time.