February 18, 2011 / 8:44 PM / 7 years ago

Intel plans $5 bln Arizona chip plant by 2013

<p>Intel workers hold up cameras as President Obama shakes hands after speaking at Intel Corporation's semiconductor manufacturing facility in Hillsboro, Oregon, February 18, 2011.Kevin Lamarque</p>

LOS ANGELES (Reuters) - Intel Corp 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 President Barack Obama on jobs. Obama will tour Intel's Oregon manufacturing base on Friday.

Obama met with Apple Inc Chief Executive 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 unemployment rate.

Construction on 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.

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.

Intel shares rose 0.5 percent to $22.07 on Nasdaq late Friday afternoon.

Reporting by Edwin Chan; Editing by Richard Chang

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