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At the time of its announcement, it was dubbed
the largest single private sector investment in
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Ohio history.
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But now its future is shrouded in uncertainty.
In January of 2022,
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Intel unveiled plans to invest $28 billion in
building two new chip factories in Licking
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County, Ohio to boost production of its
advanced semiconductors to serve both Intel
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projects and other end customers.
A lot has happened since,
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and for Intel, the past few years have brought
sluggish sales,
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layoffs, and a new CEO.
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With that, the last several updates on Intel’s
Ohio project have pretty much centered on the
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same theme: delays.
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In February, the tech firm announced a slowing
production timeline on the project,
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kicking the can down the road on the massive
semiconductor compound to now open partially in
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2030 or later.
This past week, when reporting its earnings,
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Intel alluded to more delays, saying it would
further slow the pace of construction in Ohio
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to ensure spending is aligned with market
demand.
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But things might get worse.
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Intel’s new CEO, Tan, stressed the
importance of finding external customers for
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the new plant’s production capabilities,
specifically a leading edge chip node called
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A14 that Intel has in the works.
Tan has stressed the need for Intel to build
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trust with customers, asking for feedback from
them on what the firm can do better.
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And with A14 still a few years
ready, let’s hope that there’s time to make
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some inroads, because without major customers
for their operations,
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things look grim.
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In fact, one local NBC affiliate reported that
Intel said it would likely stop all work in
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Ohio.
And if the Ohio plant gets canceled, it would
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be pricey for Intel, who will lose out on
hundreds of millions in incentives from both
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the state of Ohio and the federal government,
which put up some cash as part of the CHIPS Act.
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The other costs will come down the road when
Intel will have to outsource chip production
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instead of using its own foundry factories for
it.
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According to the report, Intel claimed that
there are just two other semiconductor
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manufacturing companies that could develop the
products they need,
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and relying on third parties would be pricey.
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The state of Ohio too will lose out on 3,000
jobs that Intel estimated would come along with
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the project should it not come to fruition.
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I’m Anna Wells, and this is Manufacturing Now.