Intel Invests $2 Billion In Rio Rancho Facilities
Thirty years ago, Intel Corp. was a small, little-known technology company, and the Rio Rancho land it now calls a campus was being used as a sod farm.
In 1981, a year after Intel arrived in New Mexico, the company won an account to supply microprocessors to power IBM PCs. Overnight, Intel became a high-tech force.
“Intel has demonstrated it is a pioneer in many respects,” says Gary Tonjes, president of Albuquerque Economic Development. And as times and technology have changed, Intel New Mexico has changed with them.
The company now is spending $2 billion to retool its Fab11X microchip-manufacturing facility for 45-nanometer technology. That’s the size of the newest transistors; fully 2 million of them would fit in a dot the size of a period.
“A lot of products are on 45 nanometer – the Core 2 Quad, the Core 2 Duo and the new Core i7,” says Jami Grindatto, corporate affairs manager for Intel New Mexico.
Rio Rancho is one of Intel’s three leading high-volume facilities in this technology, joining plants in Arizona and Israel, he says.
As transistors get smaller – next up will be the 32-nanometer process – silicon wafers get bigger and more powerful. That evolution has significant implications. “The bigger the wafer, the less factories you need, unless demand redoubles every time,” Grindatto says. “It is not like the world needs twice as many computers two years from now.” Intel Rio Rancho closed a 200-millimeter fabrication lab in 2007, resulting in 1,100 layoffs. The current industry standard is 300-millimeter wafers.
$10 Billion in Opportunities
The next evolution will be 450-millimeter wafers, expected in 2012-2014 – a switch that, with smaller transistors, will further improve productivity and cut costs. Each step, though, requires significant capital investment, and Intel decides which facilities get the work based on their competitive position, Grindatto says.
“Yes, we have lost some jobs, but the good news is Intel has been a good partner in economic development, so we can provide jobs for other folks,” says Noreen Scott, president of the Rio Rancho Economic Development Corp. She estimates Intel’s presence has attracted other companies that created 15,000 jobs in the city. “That has really helped to balance our economy.”
Another big shift is in the company’s customer base. In the 1980s, 80 to 90 percent of Intel’s products stayed in the United States; today, exports account for 75 percent of the company’s sales, Grindatto says. “We started in Europe and Japan, and the latest trend is emerging markets, especially Asia, Latin America and Eastern Europe.”
With changes in the industry, including softer demand for personal computers, tapping new markets alone won’t grow the company. Intel is targeting four new product categories: components for pocket-size computers, many of which already use Intel’s Atom processor; consumer electronics; communications devices; and embedded applications such as processors used in auto manufacturing.
“We call them our next $10 billion opportunities,” Grindatto says.