Intel is trying to regain its manufacturing lead by spending billions of dollars on new factories and creating a foundry business that will make chips for other companies. The plan was launched Tuesday by new Chief Executive Officer Pat Gelsinger, which puts Intel into direct competition with Taiwan Semiconductor Manufacturing Co., the world’s most-advanced chipmaker. Gelsinger will spend an initial $20 billion on two new plants in Arizona to support Intel’s attempt to break into the foundry business. Intel plans even more factories in the U.S., Europe, and elsewhere, with the CEO pledging that the majority of the company’s chips will be manufactured in-house.

Intel dominated the $400 billion industry for decades by making the best designs in its own cutting-edge factories. That strategy crumbled in recent years as the company missed deadlines for new production technology, while most other chipmakers tapped foundry specialists to make their designs. Intel’s factories now trail TSMC and Samsung Electronics Co., which make chips for Intel competitors, such as Advanced Micro Devices Inc., and big Intel customers including Amazon Inc. and Apple Inc. The plan will give Intel “a unique ability to have leadership products, with the leading supply chain and leadership cost structure across every portion of our business,” said Gelsinger, who re-joined the company earlier this year. “We are off to the races, we’re going to be at parity and then to move to sustained leadership, over time.”

Gelsinger’s predecessor considered abandoning Intel’s in-house manufacturing entirely and some investors wanted the company to cut costs by outsourcing production. The new plan scraps those approaches and represents an expensive, multi-year re-commitment to Intel’s manufacturing heritage.