Intel’s White House Announcement Promises a Bright Future

Intel has worked for years to reinvent itself as something other than a PC company. That mission was why the microchip maker originally spent $5 billion on a facility in Chandler, AZ in 2011. Now, that facility will get dusted off as Intel CEO Brian Kraznich announced that the company would spend $7 billion to bring the plant online. The announcement came as Kraznich stood shoulder to shoulder with President Trump and promised to create 3,000 high-wage jobs.

Is the Announcement Just a PR Stunt or Can Intel Deliver?

The Trump effect is real. Companies who have come under President Trump’s Twitter ire have seen shares drop almost instantly. Trump’s fan base will boycott any company who seems to go against the president’s views. So when Intel CEO took advantage of a White House meeting to announce that his company is aligning with Trump’s job creation efforts, it might be seen as a bit of sucking up to the commander-in-chief.

But the fact is, Intel is for real. The chip maker plans on making the planned facility the most advanced semiconductor facility in the world, providing 3,000 high-skill, high-wage manufacturing jobs. And they’re ponying up the money to make it happen. The Chandler plant will cost an additional $7 billion and take about 3-4 years to come online, creating even more jobs during that span. The new plant is expected to produce chips for 5G drones and networks, and will look to impact any industry utilizing microchips, such as automotive, healthcare, entertainment, and telecommunications.

Why is the company moving forward now and not when the plant was originally scheduled to go online back in 2011?

"Daily Report: Intel Looks For a Middle Path to the White House" by FARHAD MANJOO via NYT https://t.co/JvJZvz79eE (February 8, 2017 at 06:…

— Nathan McCartney 📎 (@nathan318) February 9, 2017

At that time, Intel made the decision not to complete the plant because of shifts in the semiconductor industry as the public turned towards tablets and smartphones and away from computers. Now, however, Intel is focused on cloud computing facilities and devices, meaning its new, more powerful chips will have a home regardless of PC sales.

But more importantly than that, Trump’s administration is adamant about being business friendly, especially to those companies who bring jobs to the country. Tax cuts and incentives will make Intel more profitable than ever as they enjoy a close relationship with the current administration.

Watch the meeting between Intel's CEO and President Trump from CBS News:

The company makes for a tantalizing long term play. As such, expect shares of Intel Corp. (INTC) to rise UP steadily over the next few years.

Dakota Access Pipeline just got the green light from President Trump. Read the whole story here.

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