Intel Delays Ohio Chip Plants, Struggles with $28 Billion Project Amid Financial Setbacks

By DTD- On Mar 1, 2025

ISLAMABAD: Intel, the US-based chip manufacturing giant, has announced a significant delay in the timeline for its $28 billion project to build two new fabrication plants in Ohio. Originally set to begin production in 2025, Intel now expects the first of these new “fabs” to begin operations in 2030.

In a statement, Intel Foundry Manufacturing General Manager Naga Chandrasekaran emphasized that the decision to delay was part of a prudent approach, aligning production with business needs and broader market demand. “It’s important that we align the start of production of our fabs with the needs of our business and broader market demand,” Chandrasekaran wrote in a message to employees.

Although construction will continue at a slower pace, Intel has maintained the flexibility to accelerate the work and start operations sooner if customer demand increases.

The delay comes as Intel faces ongoing challenges in the semiconductor industry. For the full year 2024, the company reported a net loss of $18.8 billion. Despite being one of Silicon Valley’s most iconic companies, Intel has struggled to compete with Asian rivals like TSMC and Samsung, which dominate the contract semiconductor manufacturing market. Moreover, Nvidia’s rise as a leading AI chip provider has further sidelined Intel’s position in the rapidly growing artificial intelligence sector.

Intel’s leadership has also been in flux. CEO Pat Gelsinger was forced out in December, following a loss of confidence from the board in his plans to turn the company around. His departure came after Intel announced plans to cut over 15,000 jobs and delay several chipmaking facility projects, including those in Ohio.

In addition to challenges in the US, Intel’s European ambitions are also facing setbacks. Last year, the company postponed plans to build two large chip factories in Germany and Poland due to lower-than-expected demand. Furthermore, Intel scaled back its operations in Malaysia, reflecting ongoing struggles to meet market expectations.

Despite these hurdles, the US government has backed Intel with a $7.9 billion award to boost domestic semiconductor production, a key element of President Joe Biden’s broader strategy to bring chip manufacturing back to the US.

As the company moves forward with its Ohio project at a slower pace, the semiconductor industry’s future remains uncertain, with Intel navigating an increasingly competitive and volatile market landscape.