Intel To Invest $3.5 Billion In New Mexico Fab Upgrade for Foveros Tech (Updated)

Update 04/03/2021 9:45am PT: Intel has made the formal announcement of its Rio Rancho investment and shared additional details. Intel's investment focuses on its Foveros packaging technology and does not include further funding for Optane production. We have added that information below:

Intel CEO Pat Gelsinger appeared on 60 Minutes last night to discuss the ongoing chip shortages in a wide-ranging interview with CBS News correspondent Leslie Stahl. Stahl noted during the program that Intel would announce a $3.5 billion upgrade to its Rio Rancho facility in New Mexico this week. Today Intel unveiled that it would invest in expanding its Foveros advanced packaging capacity at the location, representing a 40% increase in the company's footprint at the Rio Rancho campus.

Intel's Foveros is an advanced 3D packaging technology that allows Intel to stack already-manufactured compute tiles vertically to reduce chip footprint and optimize for cost and power efficiency. Intel's packaging expansion will help the company meet its production demand as it expands into making more 3D-stacked chips, like the 7nm Meteor Lake chips that the company announced recently.

Intel currently employs 1,800 personnel at the site, and that will be bolstered with an additional 700 new jobs created by the new investment. Intel also notes that the expansion will create 1,000 construction jobs and support 3,500 jobs in the community.

The pending Rio Rancho announcement comes on the heels of Intel's transition to its new IDM 2.0 model that will entail producing custom chips for third parties while it also vastly expands its own production capacity. Intel has already announced a $20 billion investment for two new fabs in Arizona, and it is also seeking subsidies from the US government for further US-based expansion. Intel recently confirmed a $10 billion investment in its Israel facilities, and is also reportedly seeking ~$10 billion in funding from the EU for a new fab in Europe.

Intel's spending spree comes as its rival TSMC has announced its own $100 billion investment in fabs and R&D over the next three years.

Intel currently develops and produces multiple technologies at its Rio Rancho facilities, including its EMIB packaging technology, silicon photonics products, and Optane media. Surprisingly, Intel's new investment in the facility does not include funding for Optane (also called 3D XPoint) production.

Optane media is a new type of memory that melds the speed and endurance of DRAM with the persistence of data storage devices. Sluggish uptake of consumer-class storage devices based on the speedy material led Intel to kill off the entire range of Optane products for desktop PCs earlier this year. However, Intel has told Tom's Hardware that it intends to continue to supply both the Optane storage drives and persistent memory DIMMs for its enterprise customers.

Intel's sole source of the exotic tech, Micron, recently announced that it would cease production at the end of 2021. Micron plans to put its 3D XPoint fab in Lehi, Utah, up for sale at the end of the year after it exits the business. Intel originally co-developed the technology in partnership with Micron and owns the associated IP, meaning Intel can produce the media, but the Rio Rancho fab currently isn't used for volume production.

Today's announcement doesn't hint at any of Intel's plans for producing Optane media in the future. Instead, the investment is focused solely on the company's Foveros packaging technology. Construction at the Rio Rancho campus will begin in late 2021, but the planning activities will begin immediately. Intel plans to complete the project in 2022.