San Francisco, 1 March 2025 (BSS/AFP) – Struggling US semiconductor giant Intel has announced a delay in the completion of two new fabrication plants in Ohio, citing a cautious approach to its $28 billion investment.
Initially planned to commence chip production in 2025, the project is now scheduled to begin operations in 2030, Intel stated on Friday.
“It is crucial that we align the launch of our fabrication plants with both our business needs and broader market demand,” said Naga Chandrasekaran, general manager of Intel Foundry Manufacturing, in a message to employees. “Construction will proceed at a slower pace while maintaining flexibility to accelerate the timeline should customer demand justify it.”
Struggles in a Competitive Market
For the full year of 2024, Intel reported a staggering net loss of $18.8 billion, reflecting the company’s ongoing struggle to carve out a place in the artificial intelligence (AI) revolution.
Despite being a cornerstone of Silicon Valley, Intel has fallen behind Asian rivals such as TSMC and Samsung, which have dominated the contract semiconductor manufacturing sector. Moreover, the meteoric rise of Nvidia as the leading provider of AI chips has further weakened Intel’s position.
In December, Intel’s board ousted CEO Pat Gelsinger, citing concerns over his turnaround strategy. His departure followed months of aggressive cost-cutting measures, including plans to lay off over 15,000 employees and halting or postponing multiple chipmaking projects.
Government Support Amid Challenges
In an attempt to bolster domestic semiconductor production, the US government finalised a $7.9 billion subsidy for Intel last year under the CHIPS and Science Act. However, Intel has faced similar difficulties in its European expansion.
In late 2024, the company announced delays in the construction of two mega chipmaking facilities in Germany and Poland, attributing the setbacks to lower-than-expected demand. Plans for expansion in Malaysia were also scaled back.
Global Chip Industry Outlook
Intel’s struggles reflect broader uncertainties within the semiconductor industry, as demand fluctuates and geopolitical tensions continue to shape global supply chains. While AI and data-driven technologies are expanding rapidly, chipmakers must navigate economic slowdowns and shifting market needs.
This delay in Ohio adds to the challenges facing the US semiconductor sector, which is racing to regain its competitive edge against Asia’s well-established dominance.