Intel plans expansion of U.S. manufacturing base


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Chip giant Intel ( INTC ) is expanding its manufacturing footprint in the U.S.

The company, which has built production facilities in low-labor-cost countries like China and Vietnam in recent years, is spending between $6 billion and $8 billion to renovate four of its production facilities and build a new research and development center. The four plants slated for rehabilitation are in Oregon and Arizona; Intel estimates that the renovations will create up to 1,000 permanent jobs in those two states.

Intel, by ramping up production in the U.S., is bucking the offshoring trend that's been extant for decades among American companies. But it's not just low production costs that lead Intel (and other firms) to build plants abroad, company CEO Paul Otellini indicated recently to CNN . Government grants and tax credits also serve as a powerful incentive.

Even if the U.S. doesn't provide subsidies as generous as those available overseas, Intel can afford to spend more rehabbing its American facilities. The firm has $20 billion in cash; it generated more than $3 billion in free cash flow during the third quarter.

By Benjamin Foster

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , Business , US Markets
Referenced Stocks: INTC

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