Intel Bets Big On 32nm U.S. Factory Upgrades

The sites to be upgraded are existing manufacturing facilities in Oregon, Arizona and New Mexico, Intel said. The company plans to release its first 32nm products—the so-called Westmere chips—by the end of 2009. The three facilities represent about 7,000 jobs, according to Intel, which said it does roughly 75 percent of its semiconductor manufacturing in the U.S.

"We're investing in America to keep Intel and our nation at the forefront of innovation," said Otellini in an Intel statement. "These manufacturing facilities will produce the most advanced computing technology in the world. The capabilities of our 32nm factories are truly extraordinary, and the chips they produce will become the basic building blocks of the digital world, generating economic returns far beyond our industry."

Otellini is scheduled to speak in Washington, D.C., Tuesday at the Economic Club, where he is expected to champion what he told Forbes magazine this week is "a nice statement to be made by an American company to be investing in America right now."

"For a variety of reasons, the factories where we are in the best position to ramp this technology fast were the ones that happened to be in the United States," said Otellini in the Forbes interview. "If we built a greenfield factory, it would take multiple years."

Intel's stock has fallen since the second half of 2008, and in January's reporting of its fourth-quarter earnings the company said quarterly revenue had dropped year-over-year by 23 percent.

Otellini told Forbes that Intel's resolve for its much-cited "tick-tock" strategy—hitting yearly targets for processor innovation—would not fall off track despite worsening economic conditions.

In recent weeks, analysts and other Intel observers have wondered how viable Intel's "tick-tock" road map is given the downturn. More than a few have called Intel's ability to evolve its manufacturing capabilities a deal-breaker.

In a January interview with Channelweb, Jon Peddie, president of Jon Peddie Research, said "Intel has two types of investments it has to make. The fab is first. Second, there are the innovative designs to exploit manufacturing capabilities. Companies that broke this rule are no longer in business."