Intel To Invest $7 Billion in U.S. Manufacturing Plants

While technology manufacturers are cutting back on investments, computer chipmaker Intel is doing the opposite. The company said it will invest $7 billion over the next two years on three factory upgrades in the United States.

Intel said the investment is its largest on new manufacturing and represents 7,000 high-wage jobs. The Santa Clara, Calif.-based company plans to upgrade existing facilities in Arizona, New Mexico and Oregon to manufacture its 32-nanometer products.

Intel President and CEO Paul Otellini spoke about the new technology Tuesday in a speech to the Economic Club of Washington, D.C.

"We're investing in America to keep Intel and our nation at the forefront of innovation," Otellini said. "These manufacturing facilities will produce the most advanced computing technology in the world. The capabilities of our 32nm factories are truly extraordinary, and the chips they produce will become the basic building blocks of the digital world, generating economic returns far beyond our industry."

Although more than a third of Intel's sales come from outside the U.S., the company does 75 percent of its semiconductor manufacturing and research-and-development spending in the U.S.

Is it Enough?

Intel, like competitor Advanced Micro Devices, has suffered from a decline in the market for chips. Last month, Intel said it would close old manufacturing sites in California and Oregon, and test facilities in Malaysia and the Philippines, resulting in 5,000 to 6,000 job cuts.

As the leader of the European, Middle East and Africa (EMEA) market with an 80 percent market share, Intel has a chance to survive the downturn in the market, according to IDC Research Manager Eszter Morvay.

"What is happening at the moment from a global perspective is due to the global crisis and credit crunch; it has caused a major slowdown in PC purchases across all regions. This global slowdown will continue and get worse in...