Intel announced plans to bring two semiconductor chip factories to Ohio, winning praise from President Joe Biden’s White House for its choice. For the administration, Intel’s move is a first step in ramping up chip production at home amid a global shortage. 

On Friday, Intel said it would be investing in two factories outside Columbus, Ohio, and that it would begin planning immediately. Construction at the sites is expected to begin in late 2022 and production of the chips would start by 2025.

Intel estimates that the two factories will cost $20 billion. However, the company added that it will pursue $100 million in building partnerships with educational institutions in the region that will bolster its overall research potential. 

For decades, the U.S. has fallen behind in its capacity to produce semiconductor chips, which are critical components in a wide range of devices from smartphones to computers. According to the Semiconductor Industry Association, the U.S share of global chip production has lagged from 37% in 1990 to 12% today as production shifted overseas. 

The ongoing trade tensions between the U.S.and China, as well as the COVID-19 pandemic, have disrupted supply chains for industries that rely on semiconductors. Apple, the world’s most valuable company, highlighted the role of the chip shortage in cutting into the company’s third-quarter profits.

In making the announcement about the Ohio plants, Pat Gelsinger, Intel's CEO, described the decision as a way to lead the effort to make the U.S. a leader again in chip production. 

“Today’s investment marks another significant way Intel is leading the effort to restore U.S. semiconductor manufacturing leadership,” said Gelsinger in a statement. "These factories will create a new epicenter for advanced chipmaking in the U.S. that will bolster Intel’s domestic lab-to-fab pipeline and strengthen Ohio’s leadership in research and high tech.”

These words were well-received by the White House and members of the Biden administration. After the announcement was made, Commerce Secretary Gina Raimondo lauded it as “essential to our efforts to rebuild America’s chip building capacity and create the kinds of good-paying jobs that support a vibrant American economy.” 

President Joe Biden highlighted Intel’s investment on Friday. One day earlier, the White House released a factsheet that touted Intel’s plans as proof of the administration’s work to address supply chain woes and improve American capacity to produce its own semiconductors.