Intel Delays $28 Billion Ohio Fab Expansion, Pushing Production to the 2030s

Intel has encountered another setback with its foundry business, as executives announced a delay in the completion of its $28 billion factory expansion in Ohio until at least 2030. This news comes as part of the company’s effort to better align its production timeline with market needs.

In an open letter to employees, Naga Chandrasekaran, Intel's Chief Global Operations Officer and head of its foundry division, stated, "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." Consequently, the timeline for the two fabs in Ohio has been adjusted.

The first of the two fabs is now expected to begin production between 2030 and 2031, with the second fab following about a year later. This marks a significant delay from the original plan, which aimed for production to start in 2025. Those initial plans were heavily influenced by state and federal financial incentives due to the U.S. Chips and Science Act.

By early last year, Intel had revised these plans, delaying work on the site until late 2026. The company has faced challenging financial circumstances, with its foundry division experiencing substantial losses each quarter, leading to a greater reliance on outsourcing chip production to TSMC.

In an effort to address these financial challenges, Intel has announced that it will spin off its foundry unit into a separate entity with its own management. Furthermore, the company has indefinitely postponed its planned manufacturing expansion in Europe, including its fab in Magdeburg, Germany, and its assembly site in Poland.

Complicating matters, the abrupt departure of former CEO Pat Gelsinger last year raised questions about the company's direction and strategy in the contract semiconductor manufacturing space.

• Intel is ramping up efforts with Xeon 6 to compete against AMD.
• Speculations about Broadcom and TSMC acquiring segments of Intel have sparked interest among investors.
• Intel’s datacenter and AI chief has left the company to become the CEO of Nokia.
• The Trump administration is considering implementing tariffs on foreign semiconductors, with TSMC being directly affected.

Despite the delays, construction work on the Ohio fab site has not come to a halt. The contractors have completed the basement level of the facilities and have started working on the above-ground sections. Chandrasekaran reassured employees that this construction will continue, albeit at a slower pace, allowing for the possibility to accelerate work if customer demand warrants.

The delay could ultimately position Intel for future growth, especially if demand for semiconductors increases, especially in light of the proposed import tariffs on foreign-made chips. Intel plans to ramp up production of its 18A process node later this year to support its Panther Lake family of processors, which will also be made available to external foundry customers for the first time.

Intel, Ohio, semiconductors