Intel has officially abandoned plans to build a megalab in Hillsboro, Oregon.of Oregonian received a statement today that the $700 million facility will not be built, although R&D work planned for the center has already begun at other venues across the state. Intel’s decision is aimed at reducing costs and improving efficiency, and will contribute significantly to Intel’s $3 billion savings target for 2023.
“We are reducing costs and increasing efficiency through multiple initiatives,” said Intel spokesperson Penelope Bruce. Oregonian newspaper. This includes exploring more cost-effective real estate options to continue the data center R&D work already underway in Oregon. “
This major business decision from Intel follows the reported cancellation of the IDC21 R&D center in Israel. The underlying reason is the same as cost cutting, and the underlying problem remains the semiconductor industry’s recent history and a very bleak outlook, with cyclical events hitting and recession forces continuing to reign.
Construction on the mega lab in Hillsboro, Oregon was supposed to start this year, but it seemed pretty ambitious. The facility was planned for his 200,000-square-foot lab on the company’s Jones Farm campus. Its early major work focused on new technologies for cooler and more efficient data centers. Intel will ensure that work continues at select existing Intel facilities in Oregon.
Intel’s Oregon and Israel cancellations together could save $900 million.
Other targets for deep cuts could include some of the major European investments as we see real progress in the coming months. We’ve already heard some murmurs about Intel delaying its biggest European investment, the Magdeburg megafab. But such chatter could be a tactic to exploit improved subsidies from the EU, which is seen as desperate for “self-sufficiency” in semiconductors.
It’s also interesting to see Intel’s CEO playing political games to bolster his support. Statement from WEF Earlier this week in Davos, Pat Gelsinger told CNN While oil reserves defined geopolitics in the last 50 years, the semiconductor supply chain will become more important in the next 50. He therefore adroitly promoted more investment from countries and trade blocs to lay the foundation for “a geographically balanced and resilient supply chain for him.” If Gelsinger can successfully appeal to governments in the US and Europe for his CHIP Act donations and more, it could go a long way toward settling his target cuts of more than $2 billion for the rest of Intel this year.
