Intel is poised to build a $7bn manufacturing facility in Penang, Malaysia

The Malaysian Investment Development Authority, states that Intel has chosen to build a new $7.1 billion manufacturing facility in the state of Penang. The move comes amid the ongoing global semiconductor shortage, and although the facility is years away from production, additional capacity will help to alleviate the possibility of such shortages and lessen the possibility of calamitous economic fallout in the future.

The move comes at a time when semiconductor manufacturing has become a geopolitical issue, with the US government aiming to shore up domestic production and protect itself from supply side shocks in regions beyond its control. This makes Intel’s choice to build a plant in Malaysia an interesting development.

Intel CEO Pat Gelsinger has argued that the US government needs to do more to secure on shore production, leading to speculation about the choice of Malaysia as the site of the new facility. Coincidentally (or not), US Secretary of State Antony Blinken is also in the region. It would seem as though the USA wishes to invest in the region in order to counter Chinese influence. 

Aside from the announcement of the new plant, Gelsinger is in Asia this week meeting with business and government leaders including those from TSMC, Intel’s simultaneous competitor and partner. Leaders of the two companies have traded a few barbs in recent weeks, though we all know such things will be pushed to the side when the time comes to sign big dollar contracts.

Although it takes a long time from initial groundbreaking to seeing finished products on shelves, it’s great to see companies investing huge amounts to add additional capacity. Let’s hope that 2022 delivers some good news for gamers. A GPU at around its RRP would be very welcome, and to do that, we need manufacturing capacity. All we can do is cross our fingers and toes and hope that all of the investment made since the start of the pandemic will trickle down and we can all move beyond these shortages, which we’re all well and truly sick of.

There's the potential for another problem though. In the years to come, when all of these high tech facilites come online, will there be too much capacity? Could we see oversupply? Analysts from IDC think its defiitely possible. Hey if it means we can get an RTX 4090 for $500 we're all for it. Yeah, we're dreaming.