Intel (INTC, Financial), the struggling chip manufacturer, announced a delay in its Ohio chip plant project. Initially, the company planned to invest up to $100 billion to build a massive chip manufacturing complex, Ohio One, which includes eight factories. The original plan was to begin production in 2025. However, the new timeline suggests the first wafer factory, Mod1, in New Albany, will be completed by 2030 and operational by then or the following year. The second factory, Mod2, is expected to be finished by 2031 and start production the next year.
Naga Chandrasekaran, Intel's Vice President of Manufacturing and Global Operations, emphasized the importance of aligning factory production with business and market demands. This strategy allows Intel to responsibly manage capital and adapt to customer needs. Notably, this project had already faced a delay nearly a year ago, when Intel announced that Mod1 and Mod2 would be completed between 2026 and 2027, with operations starting about a year later.
Intel has long been a leading semiconductor manufacturer but has lost ground in recent years, particularly due to missing out on the artificial intelligence boom. This has resulted in declining performance. The company is grappling with slowing sales while trying to expand its capital-intensive chip manufacturing business.
In August last year, Intel reported disappointing quarterly results, leading to the largest single-day stock drop in 50 years. The poor performance prompted plans to cut 15% of its workforce and suspend dividend payments to shareholders starting from the fourth quarter. Over the year, Intel's stock price was halved, contributing to the dismissal of former CEO Pat Gelsinger in December.
Due to ongoing losses, Intel has become a potential acquisition target. Last September, there were reports that Qualcomm was interested in acquiring parts of Intel's chip design division. More recently, Broadcom has been closely examining Intel's chip design and marketing business, while TSMC is exploring whether to control parts or all of Intel's chip factories through an investor consortium.
