Intel has once again delayed the launch of its Ohio semiconductor factory, now pushing the timeline to at least 2030.
The $28 billion facility, first announced in 2022, was initially set to begin operations in 2025 before being postponed to 2027. Now, the company has revised its estimates again, adding further uncertainty to one of the largest U.S. semiconductor investments in recent history.
The repeated delays highlight Intel’s struggles with large-scale chip manufacturing, despite securing $7.86 billion in CHIPS Act funding.
The factory was expected to reduce America’s reliance on foreign semiconductor suppliers, particularly Taiwan Semiconductor Manufacturing Company (TSMC). However, the continued setbacks raise concerns about whether government funding alone is enough to revitalize U.S. chip production.
Intel’s Ohio Facility Slips Further Behind Schedule
The Ohio project was originally introduced as part of Intel’s strategy to restore its position as a leader in semiconductor fabrication. The company had planned to break ground in 2022, ramp up construction through 2023, and start producing chips by 2025.
However, Intel later acknowledged that it could not meet that deadline and pushed the target to 2027. By the end of 2024, it further extended the timeline to 2030.
The extended delays suggest deeper issues beyond just construction timelines. Intel’s ongoing financial troubles, shifting manufacturing strategies, and growing dependence on external foundries all contribute to the project’s instability.
The company’s increasing reliance on outsourcing chip production to TSMC has also undermined its goal of strengthening domestic manufacturing.
CHIPS Act Support Fails to Accelerate Production
Intel’s Ohio facility was supposed to be a major beneficiary of the U.S. CHIPS Act, a $53 billion initiative aimed at bolstering domestic semiconductor production.
Intel secured nearly $8 billion in federal funding, making it one of the largest recipients of the program. However, despite the government’s financial backing, the project has failed to stay on track.
While the funding has helped Intel stabilize its investments, it has not been enough to prevent further delays.
The setbacks raise questions about whether direct government subsidies can effectively counteract the complexities of chip fabrication.
Meanwhile, international competitors like TSMC and Samsung continue expanding their production capacity, with TSMC investing in new European fabs to meet rising demand.
The company’s cutting-edge nodes remain in high demand, with major players like Apple and Qualcomm relying on TSMC for their most advanced processors.
Intel’s Declining Financial Position and Market Pressures
Intel’s decision to delay its Ohio plant is closely tied to its broader financial struggles. In November 2024, the company was removed from the Dow Jones Industrial Average after 25 years, underscoring its diminishing influence in the semiconductor industry.
The removal came as Nvidia took its place, reflecting the shift in market dominance toward AI-driven chipmakers.
The company had attempted to establish a foothold in AI computing with its Gaudi AI accelerators, but the product failed to meet expectations. Intel initially projected over $1 billion in revenue for Gaudi chips in 2024, only to revise its estimates downward to $500 million.
At the same time, Intel has faced issues with product reliability. The October 2024 launch of its Arrow Lake processors was met with reports of performance instability. The company responded with multiple firmware updates and by December 2024 had resolved most of the issues.
Intel Falls Behind as Competitors Expand Their Lead
Compounding Intel’s struggles is ongoing leadership instability. In December 2024, CEO Pat Gelsinger stepped down, with David Zinsner and Michelle Johnston Holthaus stepping in as interim co-CEOs. The executive shake-up reflects Intel’s broader difficulty in executing its long-term strategy, particularly in manufacturing.
At the same time, the company’s reliance on external foundries continues to grow. The decision to have its upcoming Lunar Lake processors fabricated using TSMC’s 3nm process has raised concerns about whether Intel can sustain its U.S. manufacturing commitments.
The company had previously committed to ramping up its own fabrication capacity but now appears increasingly dependent on outsourcing.
Meanwhile, Foxconn is constructing the world’s largest Nvidia-focused superchip facility in Mexico. This move not only strengthens Nvidia’s supply chain but also increases semiconductor production in North America—without Intel at the center.
Samsung, which historically lagged behind TSMC in foundry services, is also expanding aggressively, securing new contracts for advanced chip manufacturing.
U.S. Semiconductor Policy Faces New Uncertainty
Intel’s delays highlight a broader challenge for U.S. semiconductor policy. While the CHIPS Act was designed to accelerate domestic production, the Ohio project shows that financial subsidies alone cannot resolve execution problems.
Even with billions in government backing, Intel has failed to keep pace with competitors who are moving ahead without comparable levels of federal support.
The Biden administration has positioned semiconductor independence as a national security priority, aiming to reduce reliance on East Asian manufacturers.
However, Intel’s reliance on TSMC and its inability to bring new U.S. fabs online in a timely manner raises questions about the feasibility of this goal.
If the Ohio factory remains delayed until 2030 or beyond, the U.S. risks falling even further behind in the race for semiconductor self-sufficiency.
Can Intel Regain Ground?
At CES 2025, Intel attempted to shift focus by unveiling its Core Ultra Series 2 processors, emphasizing AI efficiency and advanced computing capabilities.
While these announcements serve to maintain consumer interest, they do little to address Intel’s core manufacturing setbacks.
Intel’s Ohio project was supposed to be a symbol of American semiconductor resurgence, but repeated delays have turned it into an example of the industry’s deeper challenges.
With competitors advancing rapidly and the U.S. struggling to regain lost ground, the question remains: Can Intel fix its execution issues before it falls too far behind?
