ExtremeTech is reporting that Intel (NASDAQ:INTC) has broken ground on its first semiconductor foundry that will produce chips on a 450-millimeter semiconductor wafer. 

After the initial investments are made, the costs associated with running a 450-millimeter semiconductor foundry over a current 300-millimeter foundry are significantly less for the same output. In fact, GlobalFoundries estimates that the capital expenditures associated with running a 450-millimeter foundry will be 25% lower than its 300-millimeter counterpart.  

In the following video, Fool contributor Steve Heller explains the importance of this milestone and how it could ultimately help Intel improve its gross profitability longer term.

Fool contributor Steve Heller owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.