Setting up a processor manufacturing facility can be very costly. It is very difficult to produce sensitive hardware such as a processor. Because processors produced using silicon discs can be damaged even by a grain of dust. Therefore, a very sterile environment is needed. Trying to take such precautions is already increasing the prices of processor production facilities.
Intel prepares to build $7.1 billion facility in Penang, Malaysia
The Malaysian Investment Development Authority said that Intel plans to establish a new $7.1 billion manufacturing facility in Penang state. Intel’s decision in the midst of the ongoing chip crisis is quite effective. While the facility is yet to be built, having additional capacity in such crises in the coming years will help alleviate the next chip shortage.
Also, Intel’s move comes at a time when semiconductor manufacturing has become a geopolitical issue and the US government plans to support domestic manufacturing. On the other hand, he stated that he was concerned about the future of production facilities located in locations beyond the control of the US government.
Intel CEO Pat Gelsinger argued that the US government should do more to secure production abroad. On the other hand, US Secretary of State Antony Blinken is also working on the same region. The US seems to want to invest in the region to counter Chinese influence.
Alongside the announcement of the new facility, Gelsinger will meet with business and government leaders in Asia this week, including TSMC, Intel’s concurrent competitor and partner. There is another potential problem, though. In the coming years, when all these high-tech facilities are operational, will there be too much capacity, will we see excess supply?
Analysts from IDC think this is certainly possible. Overproduction may cause CPU and GPU prices to drop in the coming years. We’ll wait and see.
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