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Intel Delays Ohio Chip Factory As Federal Funding Stalls

Intel was depending on funding from the CHIPS Act, which was passed earlier this year, but a delay funding the act by the U.S. Congress means that Intel will delay building the Ohio fab even as it continues to build facilities in Arizona and elsewhere.

Intel Thursday warned that a large semiconductor factory the company had just started working on will be delayed because of delays by the U.S. Congress to pass the CHIPS Act, which was expected to be a part of the funding of the new plant.

The CHIPS (Creating Helpful Incentives to Product Semiconductors) Act for America was passed early this year, but Congress has not yet appropriated the needed resources despite a bipartisan support.

The delay comes as Intel, under new CEO Pat Gelsinger, is looking to quickly build a world-class semiconductor manufacturing capability to reduce reliance on third-party fabs for manufacturing.

[Related: Solidigm CEO: Spinning Out Of Intel To SK Hynix ‘Gives Us The Greater Scale We Need’]

Intel has unveiled plans to make two huge investments in U.S.-based semiconductor manufacturing. The company in January said it planned to invest over $20 billion to construct two new leading-edge chip factories in Ohio, in addition to $20 billion it plans to invest in two new fabs in Arizona and $3.5 billion it plans to invest in semiconductor packaging facilities in New Mexico.

Intel is looking to expand its manufacturing footprint across Germany, Ireland, Italy, Poland and Spain with an investment of $87.8 billion over the next decade for building manufacturing plans.

Intel’s planned chip facility in Ohio was expected to create 3,000 Intel jobs and 7,000 construction jobs, and was slated for completion in 2025.

Total investment in the site could reach as much as $100 billion over the next decade, Intel said then.

Intel, in a presentation slideshow on the importance of bringing semiconductor manufacturing to the U.S. and of U.S. government support for the move, said it costs about $10 billion to build a semiconductor fab, and can take three or four years.

“The private sector cannot succeed alone. Federal investment is essential to level the playing field and support American jobs,” the company wrote.

For Intel, the delay in CHIPS Act funding means it will not be able to proceed to build the Ohio fab, a company spokesperson told CRN in an emailed statement.

Intel, in the statement, said it was “excited” to begin construction of a new leading-edge semiconductor manufacturing plant in Ohio, and is grateful for support from Ohio Governor Mike DeWine and the state government.

“As we said in our January announcement, the scope and pace of our expansion in Ohio will depend heavily on funding from the CHIPS Act. Unfortunately, CHIPS Act funding has moved more slowly than we expected and we still don’t know when it will get done. It is time for Congress to act so we can move forward at the speed and scale we have long envisioned for Ohio and our other projects to help restore U.S. semiconductor manufacturing leadership and build a more resilient semiconductor supply chain.”

The Intel spokesperson also told CRN that the delay in CHIPS Act funding impacts only the Ohio fab, and not the company’s plan to build manufacturing in Arizona.

“The scope and pace of the investment depended on the CHIPS Act funding. But also, Ohio is a greenfield site and Arizona is not,” the spokesperson said via email.

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