Intel is investing another $3.5 billion to renovate chip manufacturing facility in New Mexico

Bottom line: Intel has announced plans to spend $3.5 billion to upgrade one of its chip manufacturing facilities in Rio Rancho, New Mexico. The idea is that the heavy investment will help counter the ongoing global chip shortage, but it’s going to take some time for the money to do its job.

The money will be used to equip operations there with the ability to manufacture “advanced semiconductor packaging technologies,” including Foveros, a 3D packaging technology that allows Intel to stack logic chips vertically rather than side-by-side.

The multi-year investment will create a minimum of 700 high-tech jobs and 1,000 construction jobs, and support another 3,500 jobs in the state. Since 1980, the chipmaker has invested roughly $16.3 billion to support its New Mexico operations, which currently employ more than 1,800 people.

Newly minted Intel CEO Pat Gelsinger back in March said the chipmaker was doubling down on its manufacturing capacity with a $20 billion investment to build two new 7nm fabs in Arizona. Those fabs will utilize extreme ultraviolet lithography (EUV) in a rearchitected, simplified process flow, Intel said.

Rival TSMC said last month that it would be investing more than $100 billion over the next three years to boost its capacity.

Even with the huge influx of money, the global chip shortage isn’t going to get resolved overnight. “I think we have a couple of years until we catch up to this surging demand across every aspect of the business,” Gelsinger told 60 Minutes in a recent interview.

Planning for the expansion will begin immediately, with Intel expected to break ground later this year.

Image credit Intel Corporation