Intel Corp.’s $28 billion semiconductor project in New Albany has been delayed into the next decade, despite receiving significant federal and state funding.
The first computer chip plant was initially scheduled to be finished this year. Now Intel says it will be 2030 or 2031 due to financial concerns and a need to align chip production with market demand, The Columbus Dispatch reported.
It’s the most expensive project in the state’s history, spurred on by federal CHIPS Act funding. Intel says it is committed to the Ohio project and has invested $3.7 billion locally.
Critics contend it’s another example of government money being wasted on corporate welfare projects that never deliver the promised results.
“Governor DeWine should immediately demand negotiations with Intel to strengthen what the company will do for its workers, the environment, and the community or make clear that the state will require Intel to repay the $300 million already provided for the second plant at the earliest permitted date,” Bailey Sandin, Work and Wages Fellow at Policy Matters Ohio, said back in December before this most recent announcement.
In November, the U.S. Department of Commerce released highlights of the final contract between the government and Intel for the $7.865 billion in funding as part of the CHIPS Incentives Program, including $1.5 billion for its New Albany facility. The company has received $2.2 billion so far, The Dispatch reported.
Intel announced the delay of the two Ohio fabs in a release late last week. Construction of Mod 1 was originally slated to open in 2027, but the new target is between 2030 and 2031. Mod 2, Intel said, would be completed approximately one year later, FOX 8 News reported.
The project has raised several red flags, including the sudden departure of Intel CEO Pat Gelsinger, who spearheaded the company’s Ohio investment, on Dec. 1, 2024.
Policy Matters Ohio, a nonprofit policy research institute, contends there has been a lack of transparency with the public about the deal itself and a lack of enforceable benchmarks to hold Intel accountable. The company’s recent announcement is another indication Intel will not uphold promises it previously made to secure hundreds of millions of dollars in state aid.
“Without proper safeguards, the net positive is going to be diminished,” Sandin said. “Additionally, under the agreement, Intel is only building one Ohio semiconductor production facility in the next few years, not the two it promised would be complete by 2028 (another could be built by 2030, depending on market demand).”
The broken commitment means there will be 3,500 fewer jobs than originally anticipated – 2,000 construction jobs and 1,500 permanent production jobs. Intel is backtracking on the written promises it made to Ohioans two years ago and needs to be held accountable, Sandin maintained.
The Ohio Department of Development offered the company $300 million in grants to help with the construction of each factory, known as “fabs,” to be built by end of 2028 or the state can require repayment.
According to a news release, the Intel deal was a major campaign issue for Governor Mike DeWine, who announced the project in January 2022 and pushed for the CHIPS Act funding. The state released an impact report in March 2024. Jim Renacci, an Ohio businessman and former four-term U.S. Congressman, said that DeWine was counting his chickens before hatched.
“Announced as part of the Governor's primary campaign in 2020. Now it is delayed until 2030.....But I bet Intel never happens in Ohio,” Renacci said in a March 1 Facebook post.
Intel said the basement level was completed according to expectations, and work above ground is underway.
“While we are disappointed the plants will not open sooner, construction continues at the Ohio Intel site, and the company has continued to tell the state the fabs will be completed and produce chips,” Ohio Governor Press Secretary Dan Tierney said in the FOX 8 News report. “This is a construction delay. The project is moving forward.”
Although the delays are disappointing, Tierney said the performance-based incentives are tied to multiple other benchmarks.
Intel officials announced the new timeline last week and told employees they were made so Intel can align its factory operation with market demand and better "manage our capital responsibly."
“I wanted to be upfront and transparent with you all about our current plan. In no way does this diminish our long-term commitment to Ohio,” Naga Chandrasekaran, executive vice president, chief global operations officer, and general manager of Intel Foundry Manufacturing, told workers. “(W)e will continue to scale our hiring as we approach our operational dates. Intel is proud to call Ohio home, and we remain excited about our future here.”
Intel’s Ohio factories are part of a larger effort to bring semiconductor manufacturing back to the United States, a move that experts and government leaders have said is critical to national security.
