An existing wafer-fabrication plant in southern Israel will get a $2.7 billion cash infusion to upgrade its production lines. By the end of 2011, the refreshed plant should be spitting out next-generation chips on the 22-nanometer manufacturing process. Another $500 million factory upgrade will bring one of Intel's Irish plants up to snuff.
The foreign operations bring Intel's production capacity closer to system builders in Asia and elsewhere, but also bring economic benefits and often tax breaks as well. The leading processor maker opened a long-planned $2.5 billion chip plant in Dalian, China, last October, further expanding its foreign exposure.
If nothing else, these announcements show that Intel is serious about its capital-intensive expansion plans. The chip industry in general may be moving toward an asset-light model that rests on the broad shoulders of Taiwan Semiconductor Manufacturing, or TSMC
On the other hand, TSMC is pumping another $8 billion into its own manufacturing infrastructure this year. It's a full-fledged arms race where the ultimate winner may be semiconductor equipment makers such as Applied Materials
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