Without New Customers, Intel ‘Likely’ to Stop $28B Ohio Project

Staff
By Staff
4 Min Read

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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.

 

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