Intel delays launch of Ohio fab plant from 2025, now expected somewhere in 2027-2028

It looks like there are some major issues with US semiconductor manufacturing plans, with Intel pushing out the launch date of its bleeding-edge plant in Ohio. It was meant to be producing chips in 2025, but now that has been delayed until somewhere between 2027-2028.

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Intel's new Albany construction (source: Intel)

Intel is working on two new semiconductor manufacturing facilities in Licking County, Ohio, with the company promising $20 billion of investment into the construction project and that the fabs would be operational in 2025. But in a new report published by Ohio Governor Mike DeWine on Wednesday, Intel has coughed up just $1.5 billion of the money and that the fabs would be operational "between 2027 and 2028".

• Read more: Intel's Ohio chip plant: $20 billion to build it, 7000 workers needed
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Intel promised $20 billion but has so far only committed around $4.5 billion into the Ohio plant project, with over $2 billion received through incentives through the CHIPS Act, from which Intel has been demanding more money. But now, the fab that was meant to be ready by next year, is another two to three away.

Intel said progress was going well on the plant, outlining some key points below:

• Intel has spent approximately $1.5 billion through December 31, 2023
• A further $3 billion is contractually committed
• Intel had 69 employees from 14 Ohio counties working at the project site in December
• Construction workers from 75 of Ohio's 88 counties have contributed to the project to date
• Intel's supplier footprint has grown from 150 to 350 since the project announcement
• Plans are ready for an office building, water treatment, and reclamation facility, and an air separation unit on-site

Given all these issues and multi-year delays, Ohio politicians are still happy with the situation with Lt. Governer Jon Husted saying in a recent press release: "Construction logistics are quite amazing. Barges of equipment are coming up the Ohio river, getting offloaded in Adams County - and then the organization of enormous truckloads of equipment making their way to Licking County - adds to the billions invested already by the company and the growing number of Ohio-based suppliers".

But, of course, Ohio politicians are going to sing Intel's praises... there are billions of dollars in state-of-the-art semiconductor manufacturing plants being built in their state. They need to seem positive with a promise of the Ohio plant being operational in 2025 but being delayed until somewhere between 2027 and 2028, as there are billions and billions of dollars of CHIPS Act funding at risk.

• Read more: Pentagon says no to Intel's $3.5 billion CHIPS Act grant
• Read more: Video might have killed the radio star, but Biden's DEI is killing the CHIPS Act
• Read more: US will need 'CHIPS Act 2' investment into semiconductor manufacturing
• Read more: Intel wants another $10 billion from the CHIPS Act and Biden administration

Once the new semiconductor plant is operational, the state of Ohio will be a beacon for engineers and future chip-making staff to flock to Intel's new facility. The surrounding economy benefits from tens of thousands of new people living there, with families moving to the state for a new opportunity at Intel's new factories.

Intel is expected to create 3,000 direct jobs with Intel, with a projected annual payroll of $405 million. According to the official estimates, supporting businesses will generate another 20,000 jobs, contributing $2.8 billion to the annual gross state product in Ohio.