Intel has delayed the construction of its US$28 billion chip plant in Ohio to 2030 due to shifting market conditions and a significant net loss of US$18.8 billion in 2024. The company is also scaling back international expansions amid intense competition and has experienced a leadership change following unsuccessful turnaround efforts.
On March 1, Intel announced a significant delay in the timeline for its US$28 billion chip manufacturing project in Ohio, pushing the expected start of production from 2025 to 2030. This strategic decision aims to ensure alignment with business needs and market demand. Intel’s General Manager of Foundry Manufacturing, Naga Chandrasekaran, indicated that construction will continue, albeit at a reduced pace, with the option to accelerate if customer demand increases.
In 2024, Intel faced a substantial net loss of US$18.8 billion amid competitive pressures in the semiconductor market, where it has fallen behind Asian competitors such as TSMC and Samsung. The company also experienced challenges from Nvidia, which has emerged as a leader in AI chip production. This unfavorable market environment contributed to the recent ousting of CEO Pat Gelsinger, who was unable to implement a successful turnaround plan.
Furthermore, Intel faces additional setbacks in its global operations, postponing plans for two mega chip-making factories in Germany and Poland due to sluggish demand. The company also decided to scale back its expansion projects in Malaysia. Despite these challenges, Intel received a US$7.9 billion grant from the previous US administration aimed at boosting domestic semiconductor production.
In summary, Intel’s adjustment of its Ohio chip plant timeline reflects a cautious approach to align production with market demands. The company continues to grapple with significant financial losses and heightened competition from both traditional companies and emerging tech firms. These developments underscore the challenges Intel faces in regaining its position in the semiconductor industry amidst evolving market dynamics.
Original Source: www.malaymail.com
