Intel will never again build a chip fab in California.* It's just not a manufacturing-friendly place: from energy costs to regulations to taxes to crime. As noted yesterday on Siemens proposed new plant in Singapore: investment goes where it is welcome.
From MarketWatch, June 18:
Intel Corp. plans to build a “huge and unprecedented” $25 billion advanced chip manufacturing plant in Israel, Prime Minister Benjamin Netanyahu announced Sunday.
The agreement in principle would see a factory in Kiryat Gat open by 2027, according to a statement from Israel’s Finance Ministry.
“This is the largest investment ever in the State of Israel,” Netanyahu’s office said in a tweet Sunday. “It is an expression of great confidence in the Israeli economy and reflects the strength of the free economy we have built, and the technological economy we’re developing here.”
Intel has operated in Israel since 1974, and has a number of facilities there....
Original post:
There is a meme that California is the energy efficiency model for the U.S. and even the rest of the world. It is based on the fact that through 2007 the state had grown it's economy by X percent since X (pick a date) while holding per capita energy use flat.
The Wall Street Journal's Environmental Capital blog has two posts today that relay this meme:
Green Ink: California’s Waiver and Clean Tech’s Woes
and:
Get Smart: More Calls for Energy Efficiency to Meet Demand
I had a comment, basically off the top of my head, on why the California experience may not be a good guide:
I’m not sure that California is the best example for the rest of the world.With a couple minutes to think I would add the fact that a pretty big chunk of California's electricity is generated by burning coal in Arizona, Utah and Idaho.
Comment by - January 22, 2009 at 12:41 pm
And the fact that the growth of California's economy this decade was based on the residential real estate bubble which was not just unsustainable but was actually smoke and mirrors.
The U.S. should look elsewhere for a model, not to Zimbabwe del Norte.
Update:
One of our Climateer Investing readers emailed that the California Intel facility being closed is the D2 plant in Santa Clara.The emailer added "I think D2 was the last factory, not just in the Valley but in the entire state.
INTC’s press release also said they would halt production at:
“..Fab 20 an older 200mm wafer fabrication facility in Hillsboro, Ore….”
Sorry.
The state’s policies have resulted in the de-industrialization of the economy. With yesterday’s announcement of the closure of Fab20, Intel no longer manufactures anything in Silicon Valley. INTC hasn’t built a new plant in California since 1988 while building a $2 billion factory in Arizona.
Google built it’s latest server farm in Oregon, based on Cali’s electricity prices.
While the aerospace industry has disappeared from SoCal, it seems to do just fine in WA.
.
Finally, stats on temperature that account for most of California’s apparent efficiency:
Combined heating and cooling degree days for selected cities-
The most energy-demanding cities:
1. Minneapolis: 4,764 heating and cooling degree days
2. Milwaukee: 4,279
3. Chicago: 4,071
4. Rochester, N.Y.: 4,058
5. Buffalo: 4,022
The least energy-demanding cities:
50. San Diego: 1,072
49. Los Angeles: 1,352
48. San Francisco: 1,529
47. San Jose, Calif.: 1,657
46. Riverside, Calif.: 1,854