The Wall Street Journal has reported that Intel plans to delay the opening of a chip plant that’s been described as “the first of its kind.”
Originally set to be online by late 2025, the $20 billion Ohio project was set to bring 3,000 jobs to the region but now won’t hit its target for several reasons.
The Wall Street Journal says the factory is being postponed because of “market challenges” – a nod towards the general consensus that the market for semiconductors may be cooling in the near term.
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Also at issue, they say, is “the slow rollout of U.S. government grant money to grow the domestic industry.” Intel originally gave credit for the plant investment to the Chips & Science Act, but also blamed the bill for an earlier delay – where it pushed back the ribbon cutting in 2022 while it waited on Congress to pass the Act to begin with.
In August, reports alluded to a challenge: $231 billion has been announced to date in private sector semiconductor investments in the United States – many contingent on funding – and none of the $39 billion in domestic chip manufacturing subsidies had yet been awarded. At the time, Commerce Secretary Gina Raimondo stressed the balance between “pushing the team to go fast” but, also, “to get it right.”
In July, another chipmaker delayed a U.S. plant based on concerns over market demand. Taiwan’s TSMC announced that it would push back the estimated kickoff of its $12 billion plant in Arizona until 2025. It was also noted at the time that they faced practical challenges in construction: not enough skilled workers to build the plant.