The shortage of semiconductors continues to limit production of new vehicles across North America and other parts of the globe.
However, news reports across the State of Ohio suggest one of the world’s major chip makers, Intel Corp., is preparing to announce plans for a new chip fabrication plant near Columbus, Ohio in the middle of the so-called U.S. “Rust Belt.”
New investment headed for Ohio
The location just outside of Columbus would put the new plant within easy reach of vehicle assembly plants in Michigan, Ohio, Indiana, Illinois and Kentucky down into Tennessee, Georgia, Alabama and Mississippi.
General Motors, Ford, Stellantis, Subaru, Honda, Toyota, Nissan, Volkswagen, Kia, Hyundai, Mercedes-Benz and Mazda all operate plants in area, stretching from the Midwest into the Southeast.
Intel, according to the new reports from Ohio, is looking to invest $20 billion in the new plant, which could employ upwards of 3,000 people in what could be the largest economic development project in the state’s history.
New investment sparked by automotive innovation
Automation and globalization have had a major impact on jobs in the region during the past four decades but investments in electric vehicles, batteries and electronics are drawing new investment into the area.
GM and the South Korean firm LG Energy are nearly finished building a new battery plant in Lordstown, Ohioand have broken ground on a second in Spring Hill, Tennessee. GM also is expected to announce plans for a third battery plant near Lansing, Michigan.
Ford has announced plans for new battery plants in Kentucky and Tennessee. It also plans to build a new assembly plant to build battery-electric trucks outside of Memphis.
However, IHS Markit noted in a recent report production by the North American auto industry is still limited by the shortage of chips. Both the packaging and fabrication of semiconductors, with some exceptions, is done largely in Southeast Asia, China, Japan, South Korea and Taiwan.
Dealing with competition
Carmakers also in competition for chips with makers of smart phones, computers and other consumer electronics.
The Biden administration has mounted an effort to push semiconductor makers to shore up chip production into the United States.
Last summer, responding to the pressure, Intel, which also has new plants already under construction in Arizona, announced plans to spend as much as $100 billion on additional new plants in the United States for fabricating chips.
Intel CEO Pat Gelsinger previously told journalists his goal to make the company a cornerstone for any national semiconductor strategy, according to the Portland Business Journal.