Intel’s $25B Investment in Israel Highlights that the New Manufacturing Supercycle is Global

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Intel Corp., one of the world’s largest semiconductor manufacturers, announced its latest investment, related to a chip plant in Kiryat Gat, Israel, that will ultimately run the company $25 billion. That latest estimate includes an initial $10 billion investment, which was already announced in 2021.

Along with its $20 billion investment in an Ohio chip plant that broke ground last year, and an over $30 billion investment in Germany announced last week, Intel is perhaps the major player at the forefront of what Axios has just hailed as the start to a “manufacturing investment supercycle.” Combined with multiple other stories from last week, it appears that the press at-large is finally noticing a phenomenon that I have been writing about for months: the return of large-scale capital outlays for manufacturing infrastructure. (It is not a mystery why journalists are starting to notice: the president is now running for reelection, so he is talking more about his economic victories.)

Image courtesy of Intel

According to Axios, Joseph P. Quinlan, the head of CIO Market Strategy at Merrill and Bank of America Private Bank, wrote in a report released last week, “We believe the US is in the early stages of a manufacturing supercycle.” Quinlan told Axios, “It’s really gotten the attention of the world. When you talk to companies in South Korea, Japan, Europe, all they want to talk about is building out a presence in the US.”

At the same time, Intel’s activity, as well as that of many other heavy industrial concerns, shows that the US is by no means the only game in town. Rather than a story of foreign dollars flocking to what the American power elite used to refer to as “the indispensable nation”, it is more likely that we are simply witnessing a bunch of globalized corporate behemoths finally getting around to doing much-needed maintenance on all their many far-flung operations.

Image courtesy of Fabric8 Labs

That is, the planet’s industrial infrastructure was left to crumble for so long, that those who profit most from it were eventually forced to do something about its upkeep. This means that we can’t just expect the progress to take place in the US, because even and especially American companies have footholds everywhere on the planet outside the US, as well.

Along those lines, the recent supply chain bottlenecks have been caused precisely by the fact that certain products needed by every industry can only be obtained in a few different places. Most of those products are semiconductor related, at least so far. Therefore, to whatever extent possible, the world’s largest corporations will have to start their collective revamp by bringing chip manufacturing as close to parity as it can get, across the planet as a whole.

There are obviously countless implications for the additive manufacturing (AM) sector in all this, which begins to be hinted at by the fact that the semiconductor manufacturing investments all seem to be happening in the nations with the strongest AM sectors. Moreover, Intel, just as a for instance, also has longstanding AM investments via its venture capital arm, especially in Fabric8 Labs, whose electrochemical AM platforms are touted as having potential for semiconductor mass production.

More broadly, as this manufacturing boom begins, it’s worth taking note of which emerging technologies are most ready for action right away. This is particularly significant in the context of what I wrote about in a post on the National Semiconductor Technology Center: the manufacturing boom will be, in the first place, an R&D boom. Capital over the next several years will be seeking out how it should best be allocated over the subsequent several decades, and a massive bout of R&D on an unprecedented geographical scale is the only solution.

So, first off, the expectation should be that all of the other emerging technologies will become organized around the one that is most mature at the beginning of the cycle, i.e., AM. Second, for this to happen in practice, there has to be a direct link-up between the most advanced AM capabilities across the planet. That would help explain why the same company is kicking off the manufacturing investment supercycle by putting chip plants in three of the nations with the most sophisticated AM ecosystems — Germany, the US, and Israel — and why a fourth nation, China, is also seeing similar investments at similarly large scales.

Finally, third, the fact that AM is the most significant technology for R&D, specifically, reinforces both of the points in the previous paragraph. Among other things, the three points altogether suggest that the legacy companies which are currently most heavily invested in AM will disproportionately affect the future of manufacturing.

Featured image, rendering of Intel’s planned Ohio location, courtesy of Intel

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