back to article Intel plunking down $20bn for at least two chip factories in Ohio

Intel is scheduled to announce on Friday that it is committing $20bn to build semiconductor plants outside Columbus, Ohio, thereby strengthening domestic supply chains, according to reports from the White House. The US government's canned statement on Thursday said the effort would create 7,000 construction jobs and 3,000 …

  1. Pascal Monett Silver badge

    What ? Ohio ? Not Texas ?

    Oh dear me, is there some level of Hell that is freezing over now ?

    Oh wait, silly me, it's just that backstabbing is just as lively inside the Union as from the outside.

    At least, this time, it's more logical since Ohio is actually next to available water.

    Carry on . .

    1. Anonymous Coward
      Anonymous Coward

      Re: What ? Ohio ? Not Texas ?

      It's Cleveland. At some points in the year, the available water comes in big white lake-effect drifts taller than I am!

    2. Blank Reg Silver badge

      Re: What ? Ohio ? Not Texas ?

      And I belive Ohio has a power grid that works most of the time, even when it gets chilly outside

  2. Anonymous Coward
    Anonymous Coward

    Global Britain.....

    Here's the score so far:

    1. TSMC -- about $100 billion dollars for five foundries in Arizona

    2. Intel -- about $20 billion for two foundries in Ohio

    3. UK Government -- about £100 million for various initiatives in South Wales and elsewhere

    So.....the UK "levels up" with approximately 0.1% of the funding supplied by two publicly held companies.

    Am I missing the other 99.9% needed to compete "in the market"?

    1. Yet Another Anonymous coward Silver badge

      Re: Global Britain.....

      Cutting edge fans are full of enormously expensive machines and need an expensive controlled environment

      While initiatives are cheap, especially if you only do the announce part

  3. Marty McFly Silver badge
    Megaphone

    It is all about the taxes

    Intel has major fab facilities in Hillsboro, Oregon. The state of Oregon put a .57% tax on gross sales for businesses with over $1m in sales. It doesn't matter if the business is making money or losing money. Give $5,700 to the state for every $1m in sales.

    I don't know how much of Intel's ~$77 billion in annual sales comes out of Oregon, but I will speculate it is a significant percentage. This tax starts to add up year over year. They are not going to rip out their existing fab plants, they will just let them age out over the next decade as the next generations of chips will be made in Ohio.

    You can judge it as right or wrong, but you cannot blame a business for being smart in a fiscally hostile environment.

    1. DS999 Silver badge

      Re: It is all about the taxes

      I doubt it is only about that rather modest tax. The new fabs are just outside Columbus Ohio, home of Ohio State which is one of the largest AAU accredited (i.e. top research) universities in the country, so a good pipeline of smart people to work there.

      It also makes sense to geographically diversify, and with their current fab locations in the west (Oregon, Arizona) where a massive drought and wildfires have raged and climate change only makes more likely, and where land and housing prices are higher, moving to the eastern half of the US made sense.

      Plus I'm sure that the 30 years of tax credits Ohio is offering topped the giveaways by most other states, so we'll have to find out the details to compare with the number employed and average salary to see whether it is actually the state of Ohio spending $20 billion on the fab rather than Intel. Combined with the funds from the federal government, Intel may be getting paid to build their fab there!

    2. Duncan Macdonald

      Re: It is all about the taxes

      Intel has a number of fabs - if the Oregon ones amounted to as much as $10billion per year then the tax on that would be the grand sum of $57million. Intel's profit for 2020 was $20.899 billion after tax (the biggest tax item was income tax of $4.179 billion). I doubt that $57million of tax is enough for Intel to worry about.

      1. RandomIdiot

        Re: It is all about the taxes

        "The state of Oregon put a .57% tax on gross sales for businesses with over $1m in sales" .

        Intel will only directly pay that tax on sales to customers in Oregon. Intel's suppliers to their Oregon sites will also be paying this tax on the payments they receive from Intel, so I imagine those suppliers may raise their prices, so it could be like an indirect sales tax to Intel. But Oregon has no regular sales tax, so 0.57% does not compare that unfavorably to states with regular/actual sales taxes.

        Source:

        https://www.oregon.gov/dor/programs/businesses/Pages/CAT/CATFAQ.aspx

        "For example, the following items are excluded:

        <...>

        Sales of items or services that are delivered outside of Oregon "

    3. Greg 38

      Re: It is all about the taxes

      The Oregon fabs are R&D with low scale production ramp up to about 2000 wafer starts per week when worked there. The fabs in Arizona, Ireland, Israel and new Mexico were for the volume production

  4. Kev99 Silver badge

    I sat on what is known as a Tax Incentive Review Council of close to 20 years in Hamilton County. Our job was to determine if the tax break recipient was complying with the agreement terms and if not, make a recommendation to the local political subdivision on whether or not to continue the agreement. In all those years at least 90% of companies coming hat in hand to ask for tax relief no more needed the breaks than the man in the moon. In one case a major auto company came claiming that without a few hundred grand in breaks they would not be able to build a new transmission. By their own admission, there were only only two other plants in the world that could build the tranny - one in France, the other in Brazil.Another multi-billion dollar company wanted chump change in breaks for it's "woe is me, we need the breaks or we can't survive" project.

    Tax incentives are games, extortion, and bribes used by companies to sucker local governments into giving the farm away for little or no real benefit to the community. In my opinion, every penny abated in tax breaks should added onto the companies' federal tax obligations. And now poor, destitute, Intel needs a few hundred pesos to build a plant it absolutely needs in order to continue padding the C-levels back pockets.

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