The goal for the U.S. to become self-sufficient in producing advanced chips domestically just had another setback.
On Thursday, The Wall Street Journal said
Intel
is delaying the production timeline for its $20 billion Ohio two-chip factory project, citing difficult market conditions, and a slow distribution of U.S. government incentives.
When asked for comment on the report, Intel confirmed it would not meet its initial “aggressive” 2025 production goal.
“We remain fully committed to the project and are continuing to make progress on the construction of the factory and supporting facilities this year,” Intel said in a statement. “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.”
In midday trading Friday, Intel shares are down 2.3% to $42.35.
Intel said they have about 800 to 900 construction workers on the Ohio site, and have not made any recent changes to the construction timelines. Intel expects to have several thousand workers on the site by the end of the year.
The WSJ report said construction of the manufacturing facilities wouldn’t be completed until late 2026. Intel did not state when production would begin.
When asked for comment about the production delay of the Intel Ohio factories, the U.S. Commerce Department said the agency “cannot comment on potential [Chips Act] applicants.”
The Intel delay comes weeks after
Taiwan Semiconductor Manufacturing
Chairman Mark Liu announced a second delay to the company’s build out of U.S. chip factories in Arizona. TSMC management also suggested the level of government incentives were a factor in its decision-making over the fabs.
The U.S. Commerce Department has come under criticism for not distributing Chips Act funds more quickly. The legislation passed Congress in 2022, setting aside tens of billions to boost U.S. chip manufacturing. But thus far, the vast majority of the funds has yet to be distributed, outside of a few small deals.
There are signs announcements are forthcoming. Last week, the WSJ said the Biden administration is expected to announce “billions of dollars” in Chips Act incentives in the coming weeks. Intel CEO Pat Gelsinger posted on social media Thursday that Commerce Secretary Gina Raimondo would appear at a company event later this month, which could suggest that Chips Act subsidy announcements are imminent.
But it may be too little, too late. Billions of dollars spread across several companies may not make enough of a difference. With the major domestic chip fab delays already from TSMC and Intel, the government needs to move faster and award the tens of billions of dollars available in Chips Act incentives.
While the WSJ report said Intel, TSMC, and other companies are likely recipients, it also said the awards would be preliminary, and require further due diligence until final agreements.
Those details sound the urgency on timing isn’t there either.
Write to Tae Kim at [email protected]
Read the full article here