Intel CEO Brian Krzanich stood beside U.S. President Donald Trump yesterday afternoon in the Oval Office and announced that his company will spend $7 billion to construct a semiconductor factory in Arizona. The factory, called Fab 42, is expected to create 10,000 jobs and will be completed in three to four years.
Trump given credit for it
Trump promised to bring such kinds of investments to America while on the campaign trail. The President also immortalized the moment with a tweet. Trump told reporters that Krzanich called him a few weeks ago to say that he wanted to meet him to make a huge announcement. However, the only issue is that Intel’s investment seemingly has little to do with Trump, according to The Verge.
Thank you Brian Krzanich, CEO of @Intel. A great investment ($7 BILLION) in American INNOVATION and JOBS! #AmericaFirst?? pic.twitter.com/76lAiSSQ1l
— Donald J. Trump (@realDonaldTrump) February 8, 2017
Intel’s factory actually started in 2011, and then-CEO Paul Otellini even gave then-President Obama a tour of it. In 2014, work on Fab 42 stopped, possibly because of Intel’s failure to make progress in mobile and slowing PC sales. At that time, the chip maker said it did not need the extra manufacturing capacity. Now Intel wants to complete this factory because it needs to produce its next-gen processors, notes The Verge. Intel requires these chips to stay competitive with ascendant technologies such as the ones from ARM that dominates mobile.
The fact that the $7 billion investment was declared now, when Trump is president, appears to be purely coincidental. In an interview with CNBC, the chip maker said that it is receiving no federal incentives for the project, so it seems like the Trump administration had no role in making this factory happen.
Intel hopes for favorable regulations ahead
Nevertheless, this development is relevant for two reasons, according to The Verge. One is that it means the chip maker is being pretty opportunistic, and second, it is another example of the President getting credit for creating jobs when, in fact, he played no role.
Intel may not be getting anything from Trump now, but it surely hopes for favorable regulations going forward, notes The Verge. Recently in an email to employees, Krzanich wrote that from a regulatory and tax position, they have been disadvantaged relative to the rest of the world where they compete.
“That’s why we support the administration’s policies to level the global playing field and make US manufacturing competitive worldwide through new regulatory standards and investment policies,” Krzanich wrote.
