Intel Corp is further delaying the opening of a much-touted new semiconductor complex in Ohio, marking the latest setback to the chipmaker’s expansion plans.
The first plant, originally scheduled to begin operating this year, now would not be completed until 2030, the company said in a statement on Friday.
The factory is slated to begin running either that year or in 2031, Intel said. The completion of a second plant was postponed until 2031, with operations potentially starting the following year.
Photo: Reuters
“As we continue to invest across our US sites, it’s important that we align the start of production of our fabs with the needs of our business and broader market demand,” Intel executive vice president and chief global operations officer Naga Chandrasekaran said in the statement.
“This has always been our approach, as it allows us to manage our capital responsibly and adapt to the needs of our customers,” he said. Intel, struggling with shrinking sales and mounting losses, has been scaling back efforts to add more manufacturing capacity. The Ohio site has been a symbol of the company’s comeback hopes — and a broader US push to rebuild the country’s domestic chip production. Intel has had ambitions to turn it into the world’s largest semiconductor facility.
The chipmaker, which had dominated the industry for decades, is a major recipient of federal funds as part of the US’ CHIPS and Science Act — bipartisan legislation enacted during former US president Joe Biden’s administration to reverse a shift of manufacturing toward East Asia.
Taxpayer support is contingent on the company reaching milestones in construction, equipping the factories and then starting production. Intel was scheduled to receive US$7.9 billion in direct funding.
It is not unusual for chip companies to build the shell of new factories and then delay the final steps — installing the expensive equipment used to make the semiconductors — while they wait for demand to improve, but the Ohio facility was seen as a crucial piece of Intel’s strategy. The company has been pivoting into the role of a chip foundry, a business that makes electronics for outside clients.
The company’s plans have been in flux in recent months. Intel ousted chief executive officer Pat Gelsinger late last year and has not named a new permanent leader.
Investors have even been betting that the company might be sold in pieces — a scenario that has fueled a stock rebound this year after a steep decline last year.
In January, Intel’s interim leaders said they would pursue a more cautious, less expansive strategy than Gelsinger did. That means not adding capacity before demand justifies it, or touting big customer wins until that revenue is secured.
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