The new chips, codenamed Westmere, won't appear in servers until the end of this year or early next year, and by then, business spending on technology may be rebounding, said Gillett. "It would be hard to argue that they shouldn't be making this investment," he said.

Intel could have, theoretically, moved the manufacturing of the new chips overseas to a low-wage country. Manufacturing jobs have been flowing overseas: From 2001 to mid last year, the U.S. lost some 2.3 million manufacturing jobs, to 13.5 million, according to a .

Foreign nations are also offering Intel hundreds of millions of dollars in incentives. But the labor savings and financial incentives don't offset the capability that the company has here, says Otellini.

Analysts agree. "One of Intel's tremendous strengths is process control [in making chips]", said , a research vice president at The company has a high level of quality assurance that it can scale, she said. "This is a major technology skill" that would cost huge amounts of time and money to transfer, Fiering said.

Much of that skill level is a product of the talent coming from U.S. universities, a point made Tuesday by Otellini, who urged investment in education. Intel employs about 45,000 people in the U.S.