One of Intel’s most valuable assets is the manufacturing capability of semiconductors and the company plans to increase its already comfortable lead in this segment. With one 200,000 sqft clean room fab already in operation and another one under construction, the firm already runs the world’s largest fabs; sources however suggested that the company may expand the size of its fabs by another 50% in the foreseeable future.
According to industry sources, future clean rooms may reach a size of up to 250,000 or even 300,000 sqft – the equivalent of 5.2 football fields – to reach a production level that is necessary to match global demand. The firm considers 5000 wafer starts per week as a “minimum volume that makes economic sense for a fab to produce” and scales efficiency models from there. Intel apparently is not aware of any maximum fab size for efficient operation of a factory, because “[the company will] run out of land before [they] get to that point,” sources said.
The size of any individual appears to be limited rather by business strategy than a simple possibility to build such a massive production plant. Any high-margin product – typically most recent processors – cannot exceed a 40% production share a single fab, which helps the company to reduce the effect of possible manufacturing hiccups and distribute revenues across the globe.
Intel’s next plant – Fab28 in Israel – will have a 200,000 sqft clean room and a cost of roughly $3.5 billion. Chief financial officer recently outlined projections which put the cost of chip factories at about $5 billion in the not too distant future. Quickly rising costs will limit the amount of manufacturers being able to actually engage in such projects and are likely force the bulk of the industry into production joint-ventures.