Late last week Intel CEO Paul Otellini was named to President Barack Obama's jobs council.  This week he went to work announcing that he would be creating a bunch of jobs.  

Intel announced [press release] plans to open a $5B USD semiconductor fab, dubbed Fab 42.  Fab 42 will be located in the desert, near Chandler, Arizona, alongside the currently active Fab 32 that produces Intel's Sandy Bridge chips.  The new fab will create chips on an incredibly small 14 nanometer (nm) process, shrunk considerably from the 32 nm process that current-generation Intel CPUs are constructed on.  

For those of you who snoozed in high school physics, Intel puts this microscopic transistor size in context, stating, "A nanometer is one-billionth of a meter or the size one ninety-thousandth the width of an average human hair."

The wafers produced will measure 300 millimeters, in line with current generation yields.  By cutting thermal losses, the die shrink should help to increase the energy efficiency of Intel's CPUs -- assuming Intel can get the issue of leakage current under control.  

Brian Krzanich, senior vice president and general manager, Manufacturing and Supply Chain states, "The products based on these leading-edge chips will give consumers unprecedented levels of performance and power efficiency across a range of computing devices from high-end servers to ultra-sleek portable devices."

The plant will create 4,000 new high-tech manufacturing jobs.  Currently Intel sells three quarters of its microprocessors overseas, but manufacturers three quarters of them within the U.S.

Mr Krzanich comments, "The investment positions our manufacturing network for future growth. This fab will begin operations on a process that will allow us to create transistors with a minimum feature size of 14 nanometers. For Intel, manufacturing serves as the underpinning for our business and allows us to provide customers and consumers with leading-edge products in high volume. The unmatched scope and scale of our investments in manufacturing help Intel maintain industry leadership and drives innovation."

Word of the brand new fab facility follows news in October 2010 that Intel would be spending $6-$8B USD on facilities in Oregon and Arizona.  It's safe to assume that the remaining $1-$3B USD will be applied to retooling the Oregon facility in preparation for the next die shrink.

Together, the two projects are expected to create as many as 8,000 construction jobs.  The new plant is expected to be completed in 2013

Being on top of the game when it comes to manufacturing process is critical for Intel as it faces an impending onslaught from high-speed multi-core ARM processors in the laptop sector.  Intel recently lost as much as $1B USD when motherboards for its flagships CPU model, Sandy Bridge, were forced to be recalled due to SATA failure issues.  The chipset flaw forced Intel's partners to also recall some laptop models that bore the faulty chipset.

Still, Intel seems on a fast track to recovery, following an economic downturn for the company that began around 2006.  In 2006-2007 Intel announced 10,000 layoffs and closed several facilities.  Now it appears to be looking to re-expand, as the economic climate warms up.