President Trump met with Brian Krzanich, the chief executive of U.S.-based technology company Intel, on Wednesday to announce a $ 7 billion investment in an advanced computer chip factory in Chandler, Ariz.
Speaking from the president's side in the Oval Office, Krzanich said the facility, called Fab 42, would employ 3,000 people at its peak and indirectly create 10,000 jobs in the Arizona area in support of the factory.
In remarks to the press, Trump called Intel a "great, great company" and a "great thing for Arizona."
“Brian called a few weeks ago and said ‘We want to do a very big announcement having to do with our country, but also having to do mostly with Arizona and the jobs and the great technology that will be produced,’” Trump said.
In his remarks, Krzanich echoed the president's broader economic message, of employing Americans and increasing exports rather than imports. "Intel is very proud of the fact that a majority of our manufacturing is here in the U.S., and the majority of or research and development is here in the U.S., while over 80 percent of what we sell is sold outside of the U.S.,” Krzanich said.
Krzanich said the company had decided to make the announcement in response to Trump’s business-friendly policies on taxes and regulation. But some analysts raised the question of whether the company would have made the investment sooner or later.
"This would have happened anyway. This was always part of their plan," said Jim McGregor, an analyst at Tirias Research in Phoenix. "But obviously the current administration and Intel are going to try to get some political gain out of it."
McGregor said the announcement was a positive sign for Intel, but not a significant change in strategy or policy. He described Intel and other chipmakers as having a rotation cycle, in which they periodically update, build and shutter facilities.
The Chandler facility has featured prominently in American politics before. A company executive originally announced the factory in February 2011, after giving a tour of Intel's Hilsboro, Ore. plant to then-president Barack Obama.
In Jan. 2012, Obama visited the Chandler construction site on a tour of potential swing states in the election later that year, using it as a backdrop for a speech in which he talked about a vision for an economy built on American manufacturing.
"When this factory is finished, Intel will employ around 1,000 men and women," Obama said. "As an American, I'm proud of companies like Intel, who create jobs here."
In 2014, Intel announced it would postpone the facility’s opening amid decreased global demand for its products, the Oregonian reported at the time. For years, the factory has stood as an empty shell while Intel focused on other facilities.
It’s not clear when Intel ultimately planned to bring the Chandler facility online, but the company likely would have completed its investment in Chandler at some point, analysts said. Furthermore, as Intel invests in Arizona, it's also likely to retire older facilities in other areas — including perhaps an aging factory in Rio Rancho, N.M., said McGregor.
The Chandler facility will be completed in three to four years, Intel announced on Wednesday.
In his remarks, Krzanich said Intel had been working on the factory for several years, but had "held off actually doing this investment until now." In response to a question from the press, he said Intel had decided to make its announcement in support of the administration's tax and regulatory policies that "really make it advantageous to do manufacturing in the U.S."
Krzanich also took aim at past government policies, saying that his company had been able to achieve its success despite regulatory and tax policies that "disadvantaged us in the past relative to the competition we have across the world."
"The president and the administration's commitment to tax reform, smart regulation and deregulation and a general attitude of ‘make it in America’ has given them the confidence and the will to move forward," said Reed Cordish, assistant to the president.
Pointing out that the product was high-tech, cutting-edge technology, Cordish added, "It's a wonderful statement for where we're heading, bringing manufacturing back to America, creating 21st century jobs in America and the feeling of optimism and confidence that CEOs all over the country are showing and a validation of the president's policies and views."
Intel joined more than 100 companies to file a legal brief opposing Trump's Jan. 27 executive order, which barred entrants to the United States from seven majority-Muslim countries.
In a letter to employees about the investment on Wednesday, Krzanich briefly mentioned the controversy. "When we disagree, we don't walk away. We believe that we must be part of the conversation to voice our views on key issues such as immigration, H1B visas and other policies that are essential to innovation."
Since Trump won the election, numerous companies have announced plans to create or retain jobs in the United States. Yet some analysts have charged that many of these plans were in the works before the election, or had come at significant cost to taxpayers.
In November, air conditioning company Carrier announced it would keep hundreds of factory jobs in the United States that were slated to move to Mexico. While Trump celebrated the announcement as a win, later reporting revealed that Indiana had agreed to give the company up to $ 7 million in tax credits.
In December, when Japanese corporate giant SoftBank announced it would invest $ 50 billion and create 50,000 new jobs, analysts said that those funds likely would have been destined for the United States anyway.
Intel's stock rose after the announcement but pared gains before the market closed. The stock ended the day up just 0.08 percent, underperforming overall gains by the tech-heavy Nasdaq Composite.
As sun streamed in the windows of the Oval Office on Wednesday, Trump invited Krzanich to introduce Intel's product. Krzanich held up a shiny, reflective wafer that would be built in the Chandler factory and repeated Intel's slogan for the cameras.
When asked if Intel would bring jobs back to the United States that are currently overseas, Krzanich did not directly answer the question, saying "this position is actually about growth and new jobs in the U.S." Much of the company's manufacturing is U.S.-based, though it also has facilities in Ireland, Israel and China.
See also:
Now we know how much a handshake with Donald Trump is worth on Wall Street
Trump says making products in the U.S. is 'gonna be cheaper.' Economists disagree.
Trump's administration has a new target on trade — and it's not China or Mexico
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