Intel’s plans for a $28bn investment in chip manufacturing facilities in Ohio are now facing significant delays, reported Reuters. The first factory in New Albany is now expected to be operational by 2030, which represents a postponement of at least five years from the initial timeline. The second facility is scheduled for completion in 2031, with production anticipated to start in 2032.
These delays come as Intel seeks to reduce capital expenditures following its initiative to become a contract chip manufacturer, which has impacted its financial stability. As part of a broader cost-cutting strategy, Intel announced plans to reduce its workforce by approximately 15%, affecting nearly 15,000 employees, with the aim of achieving savings exceeding $10bn by 2025.
“The changes were made so Intel can align its factory operation with market demand and “manage capital responsibly,” said Intel Foundry Manufacturing general manager Naga Chandrasekaran. “We are taking a prudent approach to ensure we complete the project in a financially responsible manner.”
In 2022, Intel unveiled plans to invest more than $28bn in the construction of two advanced chip factories in Licking County, Ohio. The investment is designed to enhance production capabilities to meet the increasing demand for advanced semiconductors, which are crucial for a new generation of products and for serving foundry customers as part of Intel’s IDM 2.0 strategy.
The initial phase of this project is expected to generate 3,000 jobs at Intel and create 7,000 construction jobs throughout the building process. Additionally, Intel has committed $100m to establish partnerships with educational institutions, aiming to develop a skilled workforce and support research initiatives in the region.
Intel’s Q4 results surpasses analysts’ expectations
In January this year, Intel reported stronger-than-anticipated results for the fourth quarter of 2024, with revenue reaching $14.3bn, despite a 7% decline year-over-year. This figure surpassed analysts’ expectations of $13.81bn. However, the company recorded a net loss of $126m, compared to a net income of $2.67bn in the same quarter of the previous year.
For the full year of 2024, Intel’s revenue totalled $53.1bn, reflecting a 2% decrease year-over-year. Despite exceeding expectations in the latest quarter, Intel’s forecast for the first quarter of 2025 fell short of market predictions, with projected revenue between $11.7bn and $12.7bn, below the consensus estimate of $12.87bn.
Recently, Silver Lake Management reportedly in exclusive negotiations to acquire a majority stake in Intel’s programmable chip division, Altera, with the deal expected to value Altera at around $9bn.
Intel had previously acquired Altera for nearly $17bn in 2015 and announced in 2023 its intention to sell a stake in the unit as part of a broader restructuring strategy. Discussions with potential investors regarding this stake are expected to conclude by early 2025, as Intel continues to explore options for cost reduction and capital generation.
Read more: Silver Lake negotiates $9bn deal for Intel’s Altera division
