Intel Corp. shares slipped in extended trading Thursday after the Wall Street Journal reported that the start of production at the chipmaker’s new $20 billion manufacturing plant in Ohio will be delayed by at least a year.
Intel confirmed the report, saying it won’t meet its “aggressive” goal of starting production in 2025. Intel didn’t provide a new timeline, but the Journal reported that the facility likely won’t be completed until late 2026, with production that will begin later. once the equipment has been installed. The report cites market challenges and slow distribution of federal grants as reasons for the delay.
In a statement, Intel said construction has been ongoing since 2022 and that it has “made no recent changes to the pace of construction or expected timelines.” The company noted that construction times for semiconductor manufacturing facilities are typically three to five years after inauguration.
Intel INTC shares,
fell about 1% in after-hours trading following the report. Shares have risen 44% over the past 12 months, outpacing the S&P 500 index’s SPX’s 17% gain over the past year.
Cantor Fitzgerald analyst CJ Muse said in a note that the delay “changes nothing” for Intel’s outlook and will have no effect on Intel’s capex budget. “We think the news tonight is probably political,” she said, and intended to pressure the U.S. Department of Commerce on the subsidies.
Intel announced plans to build the plant two years ago, with expectations that it would become the world’s largest chip manufacturing site.
“We helped create Silicon Valley, now we will create Silicon Heartland,” Intel CEO Pat Gelsinger said at the time.
Intel said there are currently about 800 construction workers at the site and it expects to have “several thousand” by the end of this year. The facility is expected to employ 3,000 people and mark the largest private sector investment in Ohio history.
Intel has been strengthening its domestic manufacturing capabilities in recent years in an effort to free itself from Asian supply chain risks. It is expanding facilities in Oregon and Arizona and opened a new plant in New Mexico last week.