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Intel contributed $3.89 billion to Arizona’s GDP, report finds

Intel contributed an excess of $3.89 billion to Arizona’s economy in 2019, according to a new report that measured the company’s economic impact on several Western states.

Intel Corp. (Nasdaq: INTC), which is based in Santa Clara, California, has its most significant direct economic impacts in Oregon, California, Arizona and New Mexico. All told, the company directly contributed $25.9 billion to the U.S. economy in 2019. 

The report, which was researched by a third-party, found that Intel’s 52,000 employees contributed to more than $102 billion in both direct and indirect GDP impact on the total U.S. economy in 2019. 

“While I am proud of the role Intel plays in fueling U.S. economic growth and development, I know there is more we can do,” Intel CEO Pat Gelsinger said in a statement accompanying the report. “We are committed to doing our part to ensure the U.S. continues to be the leader in semiconductor manufacturing. As we continue to invest in and strengthen the U.S. economy, I know Intel’s best days are ahead of us.”

Intel is a cornerstone of the Arizona semiconductor manufacturing industry after originally setting up a factory in Chandler in 1980. The Chandler facility, known as the Ocotillo Campus, is the company’s largest manufacturing site in the world and it is set to grow even more with the addition of two new fabs announced last month.

The new fabs will cost $20 billion to build and will bring an estimated 3,000 more jobs to Arizona, in addition to the more than 12,000 Intel employees in the state now.

The report also found that Intel supports an additional 58,600 indirect jobs, from suppliers or other ancillary chip companies that have grown alongside the chip-making giant. Intel’s indirect economic impact was more $8.6 billion statewide in 2019. 

Arizona’s semiconductor industry

The pandemic induced a global shortage of computer chips which may not subside until next year. In light of the current supply crunch, American legislators have made calls to build up chip-making capacity to avoid future shortages and reduce dependency on international suppliers.

Sen. Mark Kelly previously told the Business Journal that there is still room to grow the semiconductor industry in Arizona.

“This is critical for our national security. But it’s also a great opportunity for our state as a leader in this industry already, to just double down on Arizona being a real hub for manufacturing of these critical components that go into so many things that we rely on every single day.”

The Intel economic report comes as Arizona awaits the arrival of at least one other major international chipmaker, with the possibility of a second.

Taiwan Semiconductor Manufacturing Co. will build a $12 billion fab in north Phoenix that is expected to be completed by 2024 and employ 1,900 people. The pending addition of TSMC and Intel’s latest $20 billion investment (as well as the arrival of companies like ElectraMeccanica) mean that job training initiatives are already underway to ensure there is enough local talent to fill future roles.

Later this week two land auctions will take place and one of them may be the future home of a Samsung chip-producing factory. Sites in Queen Creek and Goodyear are reportedly on a short-list of potential landing spots for Samsung’s next production facility. 

Intel’s direct impact is greatest in Oregon, where the company has a research and development campus, according to the Portland Business Journal.

According to the report, 20,400 people work for Intel in Oregon and they helped contribute $10.3 to the state’s economy in 2019. These workers make up a full 4% of the entire state’s employment, compared to about 1.5% of the workforce in Arizona.

In California, where the company is headquartered, Intel’s 14,800 employees added $8 billion to the state’s GDP. In New Mexico, Intel employs 1,200 people who contributed $400 million to the state’s GDP.

Click here for the full report.

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