Intel Corporation has announced a delay in the opening of its highly anticipated Ohio chip manufacturing facility, pushing the timeline for production into the next decade. Initially set to commence operations in 2025, the first plant will now start production in 2030 or 2031, with a second plant in the $100-billion complex expected to be operational by 2032. This delay is a significant blow to the company's efforts to regain its footing in the competitive semiconductor industry.
The decision to postpone the plant's opening comes as Intel grapples with severe financial setbacks. The company's shares suffered their worst one-day drop in fifty years this August, exacerbating a troubling year where it lost more than half its value. This decline stems from Intel's struggle to keep pace in the rapidly evolving artificial intelligence sector, a critical area where it has lagged behind competitors.
Intel's previous status as the world's leading semiconductor maker has waned, largely due to its sidelined position in the AI boom. In an effort to pivot and strengthen its market position, the company aims to delve deeper into the capital-intensive business of chip fabrication.
Despite these setbacks, Intel remains a key player in the semiconductor landscape, bolstered by significant government support. As a central beneficiary of the CHIPS and Science Act office, Intel received approximately $8 billion in grants last November to enhance domestic semiconductor production. However, aligning production timelines with market demand remains a challenge.
"As we continue to invest across our U.S. sites, it's important that we align the start of production of our fabs with the needs of our business and broader market demand," said Naga Chandrasekaran, vice president and head of global operations officer for Intel Foundry Manufacturing.
In a bid to streamline operations and reduce costs, Intel plans to cut 15% of its workforce. This move reflects broader efforts to stabilize the company's financial health while navigating an increasingly competitive environment. However, these challenges and delays have led to speculation that Intel may become a takeover target.