We reached out to Intel to confirm a report that the company is pushing back the timeline for its $20 billion fabs in Ohio to late 2026 due to market issues and delays in U.S. government funding, a story that was originally reported by the Wall Street Journal. The Intel representative neither confirmed nor denied the delay and also didn't provide a firm date for the fab opening. However, the representative did indicate that it is normal for big fab projects to require three to five years.
"While we will not meet the aggressive 2025 production goal that we anticipated when we first announced the selection of Ohio in January 2022, construction has been underway since breaking ground in late 2022, and we have not made any recent changes to our pace of construction or anticipated timelines," an Intel representative told Tom's Hardware. "Typical construction timelines for semiconductor manufacturing facilities are 3-5 years from groundbreaking, depending on a range of factors."
Relying heavily on government funds, Intel's first two fabs at its Ohio site, nicknamed the 'Silicon Heartland' by Intel CEO Pat Gelsinger, were originally set to start producing chips next year. But now the project is expected to wrap up construction by late 2026 or even later, the report claims, citing two sources familiar with the matter. WSJ's sources cite two reasons for the postponement: challenges with demand and the slow rollout of the U.S. government funding under the CHIPS Act.
Intel started to build the first two fabs at its Ohio site in September 2022. Normally, it takes about a year and a half to construct a semiconductor production facility shell and between a year or two (depending on the size of the facility) to install wafer fab tools into that shell. That said, Intel's original plans to start making chips at its Ohio fabs in 2025 were more than reasonable.
"We remain fully committed to the project and are continuing to make progress on the construction of the factory and supporting facilities this year," the representative explained to Tom's Hardware. "As we said in our January 2022 site-selection announcement, the scope and pace of Intel's expansion in Ohio may depend on funding from the CHIPS Act and other business conditions."
Currently, 800 people are working on the project, and it is expected that this number will grow significantly by the end of the year, WSJ claims. Yet, it is unclear when the construction is set to be complete and when Intel plans to initiate equipment move-in.
Intel intends to make its Ohio site a $100 billion semiconductor production hub. The site is projected to host multiple fabs built on Intel's own money, subsidies of the Ohio state, and grants from the government under the CHIPS Act. Ohio has already shown its support with $600 million in grants (on the condition that the fabs will be completed by December 31, 2028) that are available to Intel and which can be used to fund construction costs.
The delay in the project, while a setback, is part of dealing with the realities of strategic financial planning for large-scale manufacturing. In essence, Intel's Ohio project delay appears to be a strategic response to external funding delays and market dynamics. Intel remains committed to the project, seeing it as a key piece in strengthening its manufacturing prowess in particular and the U.S. semiconductor industry in general.
It is noteworthy that Intel is not the only company that's been said to delay its large-scale fab projects in the U.S. Both Samsung Foundry and TSMC had to delay deployment of their fabs in Texas and Arizona for various reasons.
