Intel will invest $7 billion on building new chip plants over the next two years.
The investment in 32 nanometer chips is Intel's largest ever in a new manufacturing process.
"The capabilities of our 32nm factories are truly extraordinary, and the chips they produce will become the basic building blocks of the digital world," said Intel CEO Paul Otellini. "We're investing in America to keep Intel and our nation at the forefront of innovation."
Intel will upgrade existing manufacturing plants in Oregon, Arizona and New Mexico. Around 7,000 employees will be retained at the factories.
The tiny, atomic-level chips will initially be used in a line of processors codenamed Westmere. The first Westmere processor was showcased yesterday, and should hit the market this year. Additional 32nm products will follow in 2010.
Westmere processors will initially be dual-core, but Intel eventually plans to release a six-core twelve-thread version, says VNUNet.