RIO RANCHO — Intel Corp. in Rio Rancho has carved out a new technology niche for itself that’s key to the global chip maker’s continuing worldwide expansion, bringing an end to employee downsizing at the plant, at least for now.
That’s welcome news for Rio Rancho, where the company’s workforce has plummeted from about 3,300 in 2013 to 1,200 as of last December.
Downsizing in recent years reflected the plant’s aging chip technology compared with Intel facilities elsewhere that have received huge corporate investments to move production into more advanced chips with greater data-processing capabilities.
But even with the downsizing, engineering teams in Rio Rancho over the last few years have managed to leapfrog ahead of other Intel plants and the semiconductor industry in general by developing new methods to fuse optics technology, or lasers, with traditional silicon-based electronics circuits. It’s next-generation technology that uses light to immensely speed data transfer, compared to traditional digital communications that rely on electronics to transfer and process information.
The semiconductor industry is scrambling to develop the new technology to manage high-speed data transfer in a hyper-connected world that provides instant access for consumers using everything from smartphones and computers to high-definition TV. And it’s key to Intel’s efforts to maintain market dominance in the data center industry, where the company provides most of the communications processing components used to manage huge computer servers and networks.
That work could bring some needed stability to Rio Rancho.
“We have no plans now for further staff reductions,” said Katie Prouty, who took over last summer as site manager for Intel in New Mexico. “We’ve even done some hiring on site this year.”
Any hiring will not replace the number of employees laid off. In fact, the workforce may now be lower than it was last December. The company won’t announce employment totals until it delivers its annual report to the Sandoval County Commission next April.
With the new technology work now under way, plus its traditional chip-making activities, the Rio Rancho site remains critical.
“(It) continues to be a very important part of our global manufacturing network,” Intel spokeswoman Linda Qian said.
Last year, Intel began incorporating Rio Rancho’s new technology into new products for data centers, making the local plant a critical cog in the company’s global manufacturing network as it penetrates deeper into the data-processing industry.
Now, the new buzzword in Rio Rancho is “silicon photonics,” Prouty said.
“We’ve been working for the past several years to develop silicon photonics products for Intel, and the company just moved into production of the first ones in mid-2016,” Prouty told the Journal. “Our vision for the Rio Rancho site now is to keep pursuing opportunities for silicon photonics, which we’ll make here in New Mexico, while we continue to manufacture the traditional chips and microprocessors that Intel provides for many other markets.”
Intel rolled out the first Made-in-New-Mexico products last summer, packaging up Rio Rancho’s new components into transceivers and receivers for data centers. But that may be just the beginning, as Rio Rancho engineers continue to develop the technology for other data-center products, and possibly for other markets as well, Prouty said.
“Optical connectivity is the next-generation technology for moving data that everyone is seeking because of the immense growth in data transfer and processing,” Prouty said.
Intel is not the first industry player to fuse lasers into silicon for data processing. In fact, one Albuquerque startup, Skorpios Technologies Inc., is marketing its own proprietary process for silicon-photonics chips.
But Intel can rely on its own extensive silicon manufacturing process to make new silicon photonics products with greater efficiency and lower cost than competitors.
That’s critical for Intel’s broader strategy of diversifying its markets beyond traditional central processing units for personal computers and laptops.
The company has suffered in recent years as use of smartphones, iPads, and other mobile devices and gadgets eclipse desktop computers, leading to corporate restructuring that included the layoff of 12,000 people worldwide last year.
But the company has worked hard to develop new chips and products for today’s markets, and it’s made particularly robust inroads into the data processing industry, which now accounts for about 30 percent of company revenue.
That bodes well for Rio Rancho with its new niche in silicon photonics.
The local workforce plunged in recent years as corporate investment went to plants in other states and countries, largely bypassing Rio Rancho. But the company is still investing in Rio Rancho, with $43 million in capital expenditures into 2016, much of it for the new silicon photonics technology.
“We’re excited about the additional capital investments at the plant,” said Mayor Greggory Hull. “This new technology reflects their commitment to Rio Rancho and New Mexico. We’re excited about it and stand ready to support Intel along with Sandoval County and the state of New Mexico in any way we can.”