Construction Work on Two Factories, Completion Now Scheduled for End of 2026, as the Company Also Awaits Government Incentives. Intel Postpones Timetable for Its $20 Billion Chip Manufacturing Project in Ohio Due to Market Challenges and Slow Disbursement of US Government Subsidy Funds to Support the Domestic Industry.

According to those involved in the project, the completion of the manufacturing facilities is now only expected at the end of 2026, even though Intel had previously planned to start chip production next year. This can only happen once Intel has installed the complex and expensive machines required for the production of modern semiconductors. "Managing large projects, particularly in our industry, often requires adapting to changing schedules," an Intel spokesperson explained.

"Our decisions are based on business conditions, market dynamics, and the responsible management of capital."

Two years ago, Intel had targeted production for 2025, but then Intel manager Keyvan Esfarjani had emphasized that the scale and pace of expansion would depend heavily on government support. Currently, about 800 people are already working on the site northeast of Columbus, as Intel reported, and by the end of the year, the company expects to have several thousand employees.

The project is expected to create a total of 7,000 construction jobs. The first two chip factories are part of a complex into which Intel wants to invest up to 100 billion dollars. The spokesperson did not want to set a new target for chip production, but emphasized that the company remains fully committed to the project. Significant progress has already been made on the site, with over 1.6 million hours worked and enough concrete poured to cover a football field with a layer over five meters high.

Delays in major chip projects are not uncommon. Taiwan's leading semiconductor manufacturer Taiwan Semiconductor Manufacturing Co. recently announced that it would postpone production at a $40 billion chip plant in Arizona while negotiations over US subsidies are ongoing. Intel's Ohio project is among the largest ongoing chip projects in the USA.

It is part of an effort by the Biden administration and chip manufacturers to expand operations in the USA and reduce dependence on factories in Asia. As technology becomes increasingly important for national security, the Chips Act provided incentives amounting to 53 billion dollars for the domestic industry two years ago, including substantial subsidies for projects like Intel's.

However, no significant grants have been awarded yet, although it is expected that the government will award billions of dollars to Intel, Taiwan Semiconductor Manufacturing Co., and other major chip companies in the coming weeks.

Intel's Ohio Project Takes Place in a State Traditionally Not Known for Large Chip Factories. In addition to the expected federal funds, Intel received 600 million dollars from the State of Ohio for the project, which is expected to create 3,000 new jobs.

Construction begins for Intel on the project at a time when the budget is tight. Chip sales boomed at the start of Covid, but two years ago, the shortage turned into a surplus as people returned to their routine purchases. Intel responded with layoffs, a cut in its dividend, and the search for investment partnerships to offset the high capital costs of building chip facilities.

Some Recent Signs Indicate a Positive Market Development for Intel, Including a Tentative Recovery in PC Sales and the Prospect of Increased Chip Demand Due to the Growth of Artificial Intelligence. However, Last Week Intel Delivered a Bleak Forecast for the First Quarter, Citing Obstacles from its Programmable Chips and Self-Driving Cars, Which are Seen as Temporary.

Despite these challenges, Intel has been able to quickly progress with expansion projects in Oregon, Arizona, and New Mexico in recent years. Last week, the company opened a new factory in New Mexico, part of a $3.5 billion investment in its operations there.