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.