Intel (Nasdaq: INTC) is fleshing out its audacious capital spending plan. A lot of it will happen outside U.S. borders.

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(NYSE: TSM), and GlobalFoundries, but Intel is dead set on keeping its manufacturing secrets close to the vest.

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 (Nasdaq: AMAT). For what it's worth, Applied Materials and many of its peers have outperformed Intel in recent months while trailing TSMC. Taiwan Semi also carries the highest Motley Fool CAPS rating out of these stocks, although none fall below the very respectable four-star water line.

Would you buy chip stocks or semiconductor equipment makers today -- or a bit of each? Discuss in the comments below.

Fool contributor Anders Bylund doesn't hold a position in any of the companies discussed here. Intel is a Motley Fool Inside Value pick. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended buying calls on 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. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.