Intel has announced it is delaying the opening of its planned $20 billion chip manufacturing complex in New Albany, Ohio until late 2026, pushing back the previous target launch date of 2025. The delay comes amid a slowdown in demand for chips globally.
Key Details
- Intel now plans to begin manufacturing chips at the Ohio site in late 2026, instead of 2025 as originally planned
- The company cited slowing demand for chips and economic uncertainty as reasons for the delay
- The complex was set to become one of the largest chip fabrication plants in the world when completed
- Intel is still moving forward with construction of the facilities, but at a slower pace aligned with projections for market growth
Background
Intel announced plans for the Ohio chip mega-site back in January 2022, with an expectation to begin manufacturing operations in 2025. The facilities represent a key part of Intel’s strategy to boost chip production in the US and become less reliant on overseas manufacturing.
The Ohio site is set to consist of two chip plants, called fabs, costing over $20 billion and spanning 1,000 acres. The plants will manufacture Intel’s most advanced chips using the company’s “Angstrom” era technology.
Construction began in September 2022. The project is expected to eventually employ up to 10,000 Intel workers and 7,000 construction workers.
What’s Behind the Delay
Intel said it made the “prudent” decision to slow construction based on significant declines in demand for PCs and servers, key markets for Intel’s chips.
The global macroeconomic climate and impacts from COVID in China were also cited as reasons for tempering near term expectations for growth.
“Market conditions have slowed from what we originally anticipated,” said Keyvan Esfarjani, Intel senior vice president.
Analysts have predicted it could be years before demand rebounds to levels expected when Intel first announced plans for the facility.
Impact and What Happens Next
The delay represents a setback, albeit a temporary one, for Intel’s ambitions in the chip manufacturing space. It also delays expected economic benefits for Ohio and the broader US chip supply chain.
However Intel reiterated its commitment to building the full scope of factories outlined in its initial plans. The company will move ahead with construction, adjusting the pace to meet updated projections.
| Original Timeline | Revised Timeline |
|---|---|
| Begin Construction: Mid 2022 | Begin Construction: Remains Mid 2022 |
| Being Manufacturing Chips: 2025 | Begin Manufacturing Chips: Late 2026 |
| Fully Operational: 2027 | Fully Operational: 2028/2029 |
While disappointing for Ohio, analysts say the delay is a prudent move by Intel given significant overcapacity across the semiconductor industry currently. Pushing back manufacturing plans will help align production capacity with demand.
Most expect demand for chips to eventually rebound, at which point production from the Ohio fabs will be crucial to growing US chip manufacturing. But Intel must bide its time until macroeconomic conditions improve.
With a huge investment already committed, Intel seems poised to make the Ohio plant a crown jewel of its manufacturing empire – even if the launch is a couple years behind schedule.
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