Intel Delays $28 Billion US Chip Plant Timeline to 2030 Amid Financial Struggles

Intel has postponed the production start for new fabrication plants in Ohio to 2030, citing a careful approach to market demand and internal pressures. The company faces significant financial losses and intense competition, prompting a reevaluation of its expansion plans in both the US and overseas. Leadership changes and strategic delays signify ongoing challenges for the iconic chipmaker.

Intel Corporation has announced a significant delay in the construction of two new chip fabrication plants in Ohio, initially set to commence production in 2025. The revised timeline has pushed production start to 2030, highlighting the company’s cautious approach in response to market conditions and internal challenges. Naga Chandrasekaran, general manager of Intel Foundry Manufacturing, emphasized the importance of aligning production with business needs and market demand, indicating that construction will proceed at a reduced pace with potential for acceleration if necessary.

In 2024, Intel reported a net loss of $18.8 billion, reflecting ongoing struggles within the company as it contends with competition from Asian giants like TSMC and Samsung, which dominate the semiconductor sector. The emergence of Nvidia as a leading AI chip provider has further complicated Intel’s market position, pushing the company to rethink its strategic plans. Following a loss of confidence from the board, CEO Pat Gelsinger was dismissed in December after announcing layoffs exceeding 15,000 as part of a cost-cutting initiative and halting several facility projects.

Additionally, the Biden administration awarded Intel $7.9 billion to bolster semiconductor manufacturing in the United States. However, delays have also affected Intel’s plans in Europe, particularly with the postponement of two major factories in Germany and Poland due to lower-than-expected demand. Furthermore, Intel has decided to scale back its operations in Malaysia, signaling a broader reevaluation of its global manufacturing strategy.

In summary, Intel’s decision to delay the start of production at its new Ohio fabs to 2030 reflects the company’s efforts to navigate significant market challenges and financial losses. The strategic pivots underscore the competitive pressure from other semiconductor firms and highlight a cautious approach to expanding manufacturing capabilities. As Intel continues to adjust its plans, its future in the semiconductor industry remains pivotal amid evolving market dynamics.

Original Source: www.malaymail.com