Intel Corp. said it will spend US$3.5 billion to upgrade its chip factory in New Mexico, part of Chief Executive Officer Pat Gelsinger’s push to revitalize its manufacturing.

The world’s largest chipmaker has three production locations in the U.S. -- Rio Rancho, New Mexico; Hillsboro, Oregon; and Chandler, Arizona. The Rio Rancho site will get the investment to support Intel’s chip packaging technology, an extension of its capabilities that will add 700 jobs at the plant, the company said Monday.Under Gelsinger, who rejoined Intel as CEO in February, Intel is trying to reclaim leadership in manufacturing technology, a position that was the keystone of its more than 30 years of dominance of the chip industry. He’s also expanding production capabilities to try to make Intel a contract manufacturing for other chipmakers, including rivals. Gelsinger has committed to spending US$20 billion on that effort.

The Intel CEO has been appealing to politicians in the U.S. and Europe for subsidies and tax breaks that will help the company and other chipmakers build production. He has argued that the concentration of manufacturing of advanced chips in Asia is a security and economic risk to the regions that once dominated the industry.On Sunday, Gelsinger said on a visit to Israel that Intel will go ahead with construction of a previously announced plant there after receiving a government grant equal to 9 per cent of its investment. Intel’s existing overseas plans are in Israel and the Republic of Ireland.