UPDATE 2-Intel plans $5 bln Arizona chip plant by 2013

Fri Feb 18, 2011 4:04pm EST

* Intel announces latest state-of-the-art plant

* Ramping up capacity globally (Adds Otellini's appointment, details on Obama's visit; updates stock price)

LOS ANGELES Feb 18 (Reuters) - Intel Corp (INTC.O) plans to build a $5 billion, cutting-edge microchip factory in Arizona by 2013, sharply ramping up its U.S. manufacturing capacity as part of a major global expansion.

The state-of-the-art plant, which will crank out microchips with next-generation 14 nanometer line-widths, is expected to bring thousands of jobs to the cash-strapped western U.S. state, which is offering more incentives to lure businesses.

The announcement came after the White House announced it had appointed Intel Chief Executive Paul Otellini to a panel of experts advising U.S. President Barack Obama on jobs. Obama will tour Intel's Oregon manufacturing base on Friday. [ID:nN18243461]

Obama met with Apple Inc (AAPL.O) CEO Steve Jobs and other technology industry leaders in northern California on Thursday as part of a campaign to promote technological innovation as a means of boosting the struggling economy and reducing the 9 percent U.S. unemployment rate.

Construction of Intel's plant should kick off in the middle of this year, it said in a statement. When completed, the plant will churn out next-generation 14-nanometer line-width transistors and microchip wafers of 300 millimeters.

Intel said in October it plans to spend $6 billion to $8 billion on high-tech manufacturing facilities in Arizona and Oregon, creating as many as 8,000 construction jobs. [ID:nN19123887]

In January, the world's largest chip maker unveiled its next-generation microchip, code-named Sandy Bridge, which it said will yield about a third of its corporate revenue in 2011.

About three-quarters of Intel's manufacturing takes place in the United States. But it is expanding capacity around the world, including in Israel and China. [ID:nTOE69P05Y]

Intel shares rose 0.77 percent to close at $22.14 on Nasdaq. (Reporting by Edwin Chan; Editing by Richard Chang)