Intel advances chip plants as AI demand surges

By Ian King Oct. 21, 2026 11:12 AM PT Intel Corp. touted progress with its long-delayed US factory expansion, saying it was finishing up a plant in Arizona and making headway on the chipmaker’s newest site in Ohio. Tool installation — a key final step — is underway at the Fab 62 plant near Phoenix, Intel Vice President Naga Chandrasekaran said in a post on the company’s website.

In New Albany, Ohio, meanwhile, Intel has installed the first major roof truss. Intel is betting that the new factories can help restore the company’s leadership in the chip industry and hone its technological edge. The Silicon Valley pioneer is also in the early stages of becoming a semiconductor foundry, a role in which it produces chips for outside clients.

The company has grown more cautious about overspending under Chief Executive Officer Lip-Bu Tan. The CEO, who took the helm in March 2025, has said that projects such as the Ohio facility will only go ahead when he’s sure there’s enough work for them. That suggests the chipmaker is now growing more confident about having demand for the new plants.

Intel has been developing two new facilities near Phoenix, located in the company’s Ocotillo Campus south of the city. Fab 52 is already operational, and Fab 62 is poised to open next door. It also has factories in the area devoted to less-advanced production.

Filling chip plants with the machinery that produces the electronic components is by far the most expensive stage of getting them ready for manufacturing. Individual tools can cost hundreds of millions of dollars. The Fab 62 facility will be in operation at the beginning of 2028, Intel said.

Under Tan’s predecessor, Pat Gelsinger, Intel positioned itself as central to attempts to restore cutting-edge chip production to the US. But that effort was undermined by the company’s loss of leadership in chip manufacturing technology over the last decade. Intel also struggled to lure enough foundry customers to justify its investments.

That left its expansion plans languishing for years. The Ohio site was envisioned as the largest chipmaking facility in the world and a symbol of Intel’s resurgence. After some initial construction and public fanfare — including a visit by former President Joe Biden in 2022 — work went on hiatus.

Intel’s announcement on Wednesday shows that the effort is moving forward again. Historically, chip companies often build factory shells — the outer structure — and then wait to purchase and install equipment until demand is solid. Though Intel has yet to announce many high-profile foundry customers, it’s currently seeing a surge in orders for its own products — specifically data center processors used to run AI services — and is struggling to keep up.

In July, the company said it would spend more than previously forecast on new plants and equipment, with the budget reaching about $20 billion this year. In 2027, it expects that number to go up significantly. Even with that renewed optimism, it’s still not investing as much as industry leader Taiwan Semiconductor Manufacturing Co., which Wall Street projects will spend roughly $60 billion.

South Korea’s Samsung Electronics Co., another chip foundry, is also significantly outspending the US company. King writes for Bloomberg. More to Read