Intel’s wrenching past six months took another lurch with plans to delay by at least five years the opening of two Ohio chip fabs well under construction. Construction will continue at a slower pace, the company said in a statement on Friday.
The news came as Intel shares climbed nearly 3% Friday, with investors and policymakers clamoring for a path forward for the troubled American institution.
The first of the two fabs, Mod 1, was initially planned to begin production as early as 2025 or 2026, but has been pushed to between 2030 and 2031. The second fab, Mod 2, will begin operations in 2032, according to a statement by Naga Chandresekaran, executive vice president and general manager of Intel Foundry.
Intel had said in early 2022 that it would invest up to $100 billion in eight fabs at the Ohio location, starting with $20 billion on a 1,000-acre site in New Albany, which would generate 3,000 jobs.
Intel updated its numbers and said Friday it plans to invest $28 billion in the two new chip factories, which has been under continuous construction since 2022. The company released a recent photo and video of the site in New Albany, called Intel Ohio One, showing multiple construction cranes and work on massive lower levels of the fabs. Crews have worked more than 6.4 million hours to date performing work on trenches and underground pipes and pouring more than 200,000 cubic yards of concrete and starting on the office buildings.
Intel received nearly $8 billion under CHIPS Act for domestic fab production
Intel has also been a recipient of nearly $8 billion in grants certified under the CHIPS Act, first authorized in 2022, but the status of those grants is not clear as the Trump administration begins to review CHIPS Act contracts under recently-installed Commerce Secretary Howard Lutnick. President Trump had called the CHIPS Act “so bad” during his campaign, and Lutnick said he would review approved contracts during his Senate nomination hearings.
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Chandrasekaran said construction will continue at a “slower pace” at the Ohio site, with the flexibility to accelerate work and start sooner if customer demand warrants doing so.
Speaking of the delay, he added, “In no way does this diminish our long-term commitment to Ohio.” The company has already started hiring Ohioans who are training at fabs in Arizona, New Mexico and Oregon. Intel will increase hiring as it approaches the operational dates. “Intel is proud to call Ohio home and we remain excited about our future here.”
Intel's decline, Gelsinger's firing, layoffs, and takeover speculation
Intel has lagged behind Nvidia and even Arm in the artificial intelligence boom, specifically around the design and production of GPUs, but its push for fabs in the US was partly meant to fulfill the need for high-end chips to meet industry needs for GPUs and future technologies.
Since CEO Pat Gelsinger abruptly left Intel in December, the company has been the subject of calls to split off its fabrication business from its design business, but the company now operates with two co-interim CEOs, one devoted to design operations and the other devoted to the fabrication business.
Last August, the company announced a disappointing quarter and plans to lay off 15% of its work force, then at about 115,000 people. Intel shares jumped nearly 3% late Friday on the fab delay news after declining 3.5% over the prior five days. Shares have climbed 17% since Jan. 1, mainly due to anticipation of an Intel takeover, according to analysts. Shares have dropped 46% over the past 12 months, however, and sat on Saturday at $23.74 .
Rumors recently have flown that TSMC, based in Taiwan, could buy into the Intel fab business, bringing its US clients like Nvidia and Apple to a base of US fab operations. TSMC is already making Apple chips at a fab in Arizona. Analysts have confirmed to Fierce that talks were recently underway, led by the Trump administration and others, to entice TSMC to somehow invest in Intel fabs partly to avoid potential tariffs on goods sold into the US from Taiwan. Other potential Intel buyers have included Qualcomm and Broadcom.
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Early reaction: Craig Barrett says "the best technology wins"
The delay on the Ohio fabs could be partly due to delays in CHIPS Act funding for Intel and other recipients and questions whether tariffs proposed by the Trump administration could hurt or help Intel, said analyst Steven Ezell, vice president of Global Innovation Policy, speaking to WBNS 10TV News.
Former Intel Chair and CEO Craig Barrett recently wrote in Fortune that Intel should not sell its foundry business to TSMC, adding he strongly disagreed with four former board members that Intel should be broken into two pieces of the foundry and design business. “Intel is back—from a technology point of view,” Barrett said, noting its use of the newest imaging technology, high NA EUV lithography, and advancements in chips.
“The best technology wins in the semiconductor industry,” Barrett said. “Let’s stop talking about breaking up Intel as the only solution. Instead let’s talk about Intel eating into TSMC’s current high-end foundry business on the basis of Intel’s technology resurgence.”