Intel is to invest $3bn in a new chip factory in Chandler, Arizona which will use next-generation 45-nanometre technology and 300mm wafers.

The factory is scheduled to start production in the second half of 2007, and will bear the prosaic name Fab 32.

Many chip developers have switched to a 'fabless' production process where they outsource the physical production of the chips. Intel, however, plans to hold on to its factories.

"Manufacturing is a key competitive advantage for Intel that serves as the underpinning for our business and allows us to provide customers with leading-edge products in high volume," said chief executive Paul Otellini.

Fab 32 will be Intel's sixth facility that can handle 300mm wafers. The company also owns eight production facilities that process 200mm wafers. A wafer is the slice of silicon out of which the actual chips are etched using lithography equipment.

The factory will create 1,000 new jobs, although work in chip fabs is typically unskilled and low paying.

Intel is currently building another factory in Arizona expected to go online later this year, and is expanding the existing Fab 24 facility in Ireland. Construction in Ireland will be finished in the first quarter of 2006.