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Intel nears completion of $3 billion Hillsboro factory expansion - OregonLive

Intel said Monday that it has begun installing manufacturing tools for the latest expansion of its D1X research factory in Hillsboro. The chipmaker said it expects to complete the facility in about six months.

Intel began work on the third phase of D1X at its Ronler Acres campus early in 2019. The factory itself dates to 2010.

The company engineers each new generation of microprocessor at D1X and begins high-volume manufacturing there after perfecting the recipe for the new chips. Intel then replicates that process at factories in Arizona, Israel and Ireland.

Intel said the first tool moving into “Mod3” at D1X is a 10-ton, thin-film deposition tool, used to add materials to a chip during the production process. Chipmaking tools typically cost millions of dollars apiece — some well over $100 million — and they represent the largest expense in semiconductor factories.

Under new CEO Pat Gelsinger, Intel is embarking on a building boom as the company seeks to reverse years of stumbles in its Oregon-based manufacturing division. Production defects have delayed three successive generations of Intel processors, and rivals have leaped ahead with more advanced technology, putting Intel at a competitive disadvantage.

With a new focus on chip engineering and production, Gelsinger hopes Intel can catch up to its competitors within three years. And Gelsinger is expanding into the contract manufacturing business, known as foundry work, offering up Intel’s factories to make chips for other companies.

Investors are skeptical that Gelsinger can reverse Intel’s fortunes, and are especially worried about a slowdown in its data center business as competitors like AMD take market share in the highly profitable sector. Intel’s stock, which jumped following Gelsinger’s hiring last spring, has settled back to roughly where it was before he came on board.

Intel hopes to capitalize on a chip shortage that is constraining supplies of everything from laptops to automakers, and to receive a share of more than $50 billion in federal subsidies for new semiconductor factories.

Intel has already announced plans to spend $20 billion on new factories in Arizona, and Gelsinger has said he will announce new factories, called fabs, in Europe and the U.S. later this year.

Intel is Oregon’s largest corporate employer, with roughly 21,000 people working in Washington County, but the state is not a candidate for that new U.S. fab. In May, though, Gelsinger said Intel still has room to expand its research site at Ronler Acres and will add factory capacity there within the next few years.

-- Mike Rogoway | mrogoway@oregonian.com | twitter: @rogoway | 503-294-7699

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