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Intel Invests Billions Into Processor Upgrade

Intel plans to spend as much as $8 billion on its U.S. manufacturing facilities in preparation for the launch of the company's next-generation of processors, which will be built on circuitry much smaller than today's chips.

Intel said Tuesday the money would be spent on retooling four existing factories, called fabs and on construction of a plant in Oregon. The projects are expected to support 6,000 to 8,000 construction jobs and result in 800 to 1,000 new permanent high-tech jobs.

Intel's investment is expected to lead to higher-performing processors that consume energy more efficiently. But beyond the product advancements, Intel is creating high-wage, tech jobs at a time when job creation is stalled as the U.S. economy recovers from the worst recession since the Great Depression.

"The most immediate impact of our multi-billion-dollar investment will be the thousands of jobs associated with building a new fab and upgrading four others, and the high-wage, high-tech manufacturing jobs that follow," Intel Chief Executive Paul Otellini said in a statement.

Besides preparing its fabs for new PC products, Intel is also increasing capacity to fill increasing demand for chips to power mobile devices, such as smartphones and tablet computers. Such markets are expected to one day dominate the tech industry, which has been centered mostly on desktops and laptops.

Intel's new fab will be called D1X. The facility is scheduled to open for research and development work in 2013. The fabs scheduled for upgrades include two in Arizona, Fab 12 and Fab 32, and two in Oregon, D1C and D1D.

The latest investment follows a similar multi-billion-dollar expenditure on U.S. facilities in 2009, as Intel ramped up for building 32-nm products, which are being used in PCs, servers and mobile devices today. The company's upcoming 22-nm microprocessors, codenamed Ivy Bridge, are scheduled to go into production in late 2011.

In choosing to invest in the U.S, rather than in factories overseas, Intel is delivering what economists say is needed to revive the country's manufacturing sector, which is a focus on industries that can create high-paying, highly skilled jobs, rather than low-wage factories that make clothes, inexpensive appliances and other products that are mostly made overseas today.

"Contrary to conventional wisdom, we can retain a vibrant manufacturing economy here in the United States by focusing on the industries of the future," Brian Krzanich, senior VP and general manager of Intel's manufacturing and supply chain, said.

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