Intel Corporation (NASDAQ: INTC) shares fell after the Wall Street Journal revealed a minimum one-year delay in the start of production at its new $20 billion Ohio manufacturing plant.
Intel (INTC) has formally confirmed the report, indicating its inability to meet the ambitious objective of initiating production by 2025. While Intel did not specify a revised timeline, the Journal suggests that the facility is unlikely to be finished until the end of 2026, with production beginning following that once the necessary equipment is in place. The report pointed to market challenges and the slow rollout of federal grant money as the reasons behind the delay.
In a statement, Intel clarified that construction has been in progress since 2022 and that there have been “no recent modifications to our construction speed or expected timelines.” The company highlighted that semiconductor manufacturing facilities typically take three to five years after groundbreaking to complete.
Analyst Perspective on the Situation
C.J. Muse, an analyst at Cantor Fitzgerald, downplayed the impact of the delay on Intel’s outlook, stating that it “doesn’t change a thing” and won’t affect Intel’s capex budget. He suggested that the news might be politically motivated, aimed at pressuring the U.S. Commerce Department on subsidy grants.
Two years ago, Intel disclosed its intentions to construct the facility, with the projection that it would become the most extensive chip-manufacturing site in the world.
The CEO of Intel, Pat Gelsinger, stated at that time,
“We helped to establish the Silicon Valley now, we’re going to do the Silicon Heartland.”
Intel disclosed that it currently has around 800 construction workers at the site. The company anticipates that this number will increase to “several thousand” by the end of the current year. The facility, once operational, is expected to employ 3,000 people, making it the most significant private-sector investment in Ohio’s history.
Intel (NASDAQ: INTC) Stock Reaction
INTC stock dropped 1.75% to close at $42.60 on Friday. The traders had exchanged hands with 53,620,669 (53.62 million) shares compared to the average daily trading volume of 42.54 million.