Intel said this morning that it plans a massive expansion of D1X, the new, $3 billion research factory now under construction at its Ronler Acres campus in Hillsboro.

Intel plans 2.5 million square feet of new buildings altogether, anchored by a 1.1. million-square foot research factory called D1X Mod 2.

Additionally, Intel will add an office building, a manufacturing support building, and another parking garage.

It will be a mammoth undertaking, and the cost of the second module will almost surely match or exceed the original, $3 billion project cost -- though Intel declined this morning to talk specifics or say how many jobs it expects to add at the site.

"Long-term investment in technology is what we do," said corporate spokesman Chuck Mulloy at Intel's headquarters in Santa Clara, Calif. "When we build anything, we're placing a strategic bet."

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Intel's largest and most advanced operations are in Washington County, where the company already employs close to 17,000 -- more than any other business in Oregon. In 2010, the company said it expected 6,000 to 8,000 people would work on the original phase of D1X.

"What I see is a significant investment by Intel for the city of Hillsboro and the state of Oregon," said Colin Cooper, the city's assistant planning director.

Altogether, he said, the four new buildings are even larger than the original project Intel announced in 2010.

. Intel said construction of the second phase will begin next year, and start production in 2015.

That's roughly the time that the chip industry hopes to move to larger, 450-millimeter silicon wafers that could cut the cost of each chip by nearly a third.

The industry is also preparing to implement new, "extreme ultraviolet" production tools that would enable even smaller feature sizes on computer chips.

Additionally, Intel confirmed this morning that it plans to upgrade its shuttered Fab 20 production facility and integrate it into an adjoining Ronler Acres research factory, D1C.

The company said that the old Fab 20 will now be able to make chips on 300-millimeter wafers, an upgrade from the 200-millimeter wafers that the old factory used until it closed two years ago.

That project has been exciting Intel's contractors and suppliers, but is dwarfed by the news of the D1X expansion.

Intel's Oregon operations date to the 1970s. It made Oregon its main production hub in the 1990s, as the state and local governments approved a series of tax breaks that exempt nearly all of the company's equipment from property taxes and sharply reduced its corporate income tax.

New at Intel Ronler Acres

D1X, Mod2

: 1.1 million square feet (identical to the original D1X)

RA4

: Seven-story, 1 million-square-foot office building and manufacturing support building adjacent to original D1X.

MSB

: 400,000 square-foot manufacturing support building attached to the original D1X.

RAP2e

: A five-story, 3,000-space parking garage adjacent to another garage now under construction on the south side of the property.

D1Ce: Formerly Fab 20, Intel closed this factory in 2010. It will be upgraded to support 300-millimeter silicon wafers, the current industry standard, and incorporated into the existing D1C research factory as a "D1C Expansion."

Under a 2005 agreement with Washington County and Hillsboro, which took effect in 2010, Intel receives tax breaks on up to $25 billion in equipment. The county valued those exemptions at $579 million over the 15-year life of the deal.



Intel also has another factory at Ronler Acres, D1D, which is currently the company's most advanced.

That's where it makes the first of each new generation of chips, then exporting the production process to facilities in Arizona, New Mexico, Israel and Ireland.

When Intel started work on the first phase of D1X in 2010, the company said it expected as many as 8,000 construction workers would participate in the project over its construction timeline.

It expected to add several hundred more employees when the facility opens in 2013.

Intel would not say this morning exactly why it's adding to D1X, but the second phase will give the company more production capacity and ready it for more advanced technology.

Intel overhauls the architecture of its computer chips every two years, incorporating smaller, more advanced features in pursuit of

-- a maxim coined by company co-founder Gordon Moore that suggests the number of transistors on a computer chip will double every two years, providing rapid increases in computing power.

"This is the key to being able to stay on Moore's Law and get the benefits we get from Moore's Law," Mulloy said.

Note: This story has been updated with comment from Intel, additional context and information about Fab 20, and corrected dimensions for the support buildings in the project's second phase.

-- Mike Rogoway; twitter: @rogoway; phone: 503-294-7699