Intel is investing $28 billion on the Ohio project, dubbed the “Silicon Heartland.” The two plants, known as “fabs,” are being built simultaneously, Intel Communications Director Linda Qian said last spring.
The plants will produce the “most advanced semiconductor processors in the U.S. (and provide) capacity for Intel’s foundry customers as demand for leading-edge U.S.-made chips increases,” according to a fact sheet provided by Akopyan.
There will be 7,000 construction jobs and 3,000 new manufacturing jobs at the plants, according to Intel. The two plants are slated to be completed in 2026-2027 and become operational in 2027-2028, according to a performance report Intel Vice President and Ohio Site Manager Jim Evers sent the Ohio Department of Development on March 1.
“Intel has not informed the state of any new delays or changes in job figures or investment figures. The project is proceeding as planned,” said Dan Tierney, press secretary for Ohio Gov. Mike DeWine.
On Nov. 26 the U.S. Department of Commerce and Intel announced the company was awarded $7.865 billion — including $1.5 billion for the Ohio project — in direct CHIPS and Science Act funding for Intel’s plan to spend $90 billion by the end of the decade on expansion of semiconductor manufacturing and advanced packaging in Ohio, Arizona, New Mexico, and Oregon.
Intel said the plan is part of a $100+ billion U.S. expansion project estimated to bring 10,000 manufacturing jobs and 20,000 construction jobs across all four states.
The CHIPS funding designated for Intel’s Ohio project is for “creation of a new regional chipmaking ecosystem, anchored by a new leading-edge logic fab, which is part of Intel’s broader commitment to build two leading-edge fabs, that will produce the Intel 14A node and other future Intel nodes and expand leading-edge foundry capacity,” according to a project summary released by the commerce department.
Credit: Intel Corporation
Credit: Intel Corporation
“(This) CHIPS award is enabling Intel to drive one of the most significant semiconductor manufacturing expansions in U.S. history,” U.S. Secretary of Commerce Gina Raimondo said in a news release announcing the funding.
Intel’s award includes $65 million for workforce development investments to prepare people for careers in the semiconductor industry.
Intel began those training efforts last year and awarded $17.7 million for a three-year period to an alliance of more than 80 Ohio colleges and universities, including ten in the Dayton-Springfield-Butler County region as of earlier this year, according to the company. Intel also is funding kindergarten-12 science, technology, education, arts and math programs in Ohio.
‘Leading-edge chips’
Semiconductors are critical components in a variety of products, including computers, cellphones, appliances, satellites, electric vehicles, defense systems such as F-35 fighter jets, and also are required for artificial intelligence applications (AI), quantum computing, biotechnology and clean energy.
“Leading-edge chips power the most sophisticated technology on the planet, including developing AI and building critical military capabilities. Intel’s process technologies, such as Intel 18A and advanced packaging technologies, combined with its foundry services, would strengthen the domestic supply of these advanced chips,” the Commerce Department news release said.
In September the U.S. Department of Defense announced it had awarded Intel up to $3 billion in additional CHIPS funding to support “the manufacturing of microelectronics and ensure access to a domestic supply chain of advanced semiconductors for national security.”
After the November CHIPS funding announcement, liberal-leaning think tank Policy Matters Ohio said there needs to be more transparency and accountability measures by federal and state governments to make sure Intel reaches the investment and employment commitments for the two Ohio fabrication plants.
The feds “disburse the funds based on Intel’s completion of project milestones,” according to the Commerce Department news release announcing the funding.
Intel made specific commitments to Ohio when the state awarded a $600 million onshoring grant and job creation tax credit for the two plants. Intel pledged to invest at least $20 billion on the Ohio project and hire 3,000 people with an annual payroll of $405 million by Dec. 31, 2028, according to the Ohio Department of Development.
Credit: Intel Corporation
Credit: Intel Corporation
“Please note the onshoring grant and job creation tax credit are not paid unless the commitment is achieved,” Tierney said.
Intel is required to submit annual reports to the state listing metrics such as total investment, grant funds expended, payroll, hiring, construction updates and project completion date.
“Transparency is always important, and we believe the public should be kept well-informed on the statewide impact of this transformative project,” DeWine said when the state released the March 1 annual report from Evers.
Financial troubles
Intel, which employs about 45,000 people, has struggled financially, particularly as AI took off.
The company posted a $16.6 billion quarterly loss in October — it’s largest ever — and cut 15,000 jobs earlier this year. On Dec. 2 Intel announced Gelsinger had retired from the company and stepped down from the board of directors, effective Dec. 1.
In recent years chip-designer Nvidia became a leader in AI and is now the most valuable company in the world, replacing Intel on the Dow Jones Industrial Average in November.
“So the market has changed on Intel and Intel hasn’t caught up,” said Jared Pincin, associate professor of economics at Cedarville University.
Credit: SCOTT HUCK
Credit: SCOTT HUCK
He thinks Intel is a possible takeover target although any such effort would face regulatory hurdles.
“They’ve lost enough market share that they could be attractive to somebody out there,” Pincin said. “The reality is the demand for the chips that they’re making is not where they expected it to be.”
Founded in 1968 in California, Intel built its reputation designing and fabricating semiconductors used in computers, servers and cloud systems, such as Amazon Web Services, which recently expanded its collaboration with Intel.
In September Gelsinger announced a variety of moves to increase efficiency and savings while continuing a stronger focus on the company’s AI strategy.
And he announced a plan to make the Intel Foundry, which is the manufacturing side of the company, an independent subsidiary. Elly did not directly respond to this news outlet’s question about what impact that would have on the New Albany plants.
She said Gelsinger’s “decision to retire was a personal decision” and provided a company news release indicating two senior leaders will serve as interim co-chief executive officers while the board searches for a new CEO.
“The new CEO could take Intel in a different direction than what they are right now,” Pincin said. “I’m not saying likely, but it is possible that direction moves them away from what the previous administration was doing.”
Intel is not the only tech company that has struggled and laid off workers this year, said Pincin. Hiring booms during the COVID-19 pandemic gave way to pullbacks across the tech sector, he said.
“The main pullback (for Intel) is the business model isn’t working right now,” Pincin said. “The board knows that their current trajectory wasn’t working.”
He recently read an analysis that argued Intel is positioning itself well for a year or two into the future. Time will tell, Pincin said.
“It’s a classic story of a company that was a leader and for whatever reason they lost their way,” Pincin said. “Now we’ll see if they can come back from it.”
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See all the stories in our 2024 Intel Corp. series here:
Intel-funded higher education alliances training people for 3,000 new jobs at semiconductor plants
‘Silicon Heartland’ construction progressing at Intel semiconductor plants that will employ 3,000
PHOTOS: See the Intel Corp. semiconductor fabrication plants in being built in New Albany, Ohio
VIDEO: See Intel’s Arizona semiconductor factories in action
5 things to know about Intel’s new Ohio plants and workforce training efforts
VIDEO: See what happens inside Intel Corp. factories in Oregon
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