Intel Delays $20 Billion Ohio Project, Citing Slow Chip Market

An anonymous reader quotes a report from Reuters: Intel is delaying the construction timeline for its $20 billion chipmaking project in Ohio amid market challenges and the slow rollout of U.S. grant money, the Wall Street Journal reported on Thursday. Its initial timeline had chip-making starting next year. Construction on the manufacturing facilities now is not expected to be finished until late 2026, the report said, citing people involved in the project. Shares of the chipmaker were last down 1.5% in extended trading.

"We are fully committed to completing the project, and construction is continuing. We have made a lot of progress in the last year," an Intel spokesperson said, adding that managing large-scale projects often involves changing timelines. Uncertain demand for its chips used in the traditional server and personal computer markets had led the company to forecast revenue for the first quarter below market estimates late last month. This came as a shift in spending to AI data servers, dominated by rivals Nvidia and aspiring AI competitor Advanced Micro Devices sapped demand for traditional server chips -- Intel's core data center offering.

What?

[Maury Markowitz]

"Intel Delays $20 Billion Ohio Project, Citing Slow Chip Market"

So I seem to recall a worldwide shortage of chips. One that was slowing down all sorts of manufacturing, notably cars.

But the real problem is not *enough* market.

Gotcha.

Re:What?

[Zak3056]

This was my immediate thought as well, but the issue doesn't appear to be "lack of demand for chips" but rather "lack of demand for Intel's chips."

Re:What?

[AmiMoJo]

Indeed, their last and current generations have been quite poor. Extremely power hungry and hot, and still not matching Ryzen in performance per Euro.

It's interesting that they don't want to invest in a new fab, because one of the main reasons why their current products suck is their old manufacturing process that can't compete with the energy efficiency of AMD's manufacturing partner (TSMC).

Re:

[drinkypoo]

I take this to mean Intel is having more problems moving to a finer process... again.

It's kind of hilarious that was Intel's only competitive advantage, and they had to lean on it to make up for their inferior designs. Well, that and the anticompetitive acts of which they were convicted...

Re:

[sjames]

The thing is, Intel backed in to their current position and even tripped over it. Way back in the late '70s, the 8080 was eclipsed by the Z80. Motorola had a fewgood things going. Intel was heavily into a really complex object-oriented "micromainframe" processor. The 8086 was to be an I/O co-processor in that archetecture much like an IBM channel controller.

But the iAPX 432 was a dog. Engineers soon found out it was faster to send code to the 8086 and have it do the computation. Then the related 8088 got s

Re:

[organgtool]

I was recently searching for a processor and I have no brand loyalty, so I looked at Intel's previous gen first to see what they offered. For my use case, the Core i5-13600T seemed like a good fit. I then noticed that AMD just came out with a new generation of chips, so I decided to compare them and Passmark gives the AMD Ryzen 5 8600G a very similar benchmark score, but the 8600G costs $100 more and the estimated yearly running cost is twice as high. I know benchmarks aren't always good representations

Re:What?

[toddz]

Chip industry veteran here, I can say that the chip shortages are mostly over. Manufacturers who consume chips over bought and now they are pulling back So now chip manufacturers have inventory and lead times are back to pre 2021 numbers. This may not hold true for AI chip manufacturers because of the hot market. However for manufacturers creating chips for most consumer goods, this largely holds true.

Re:

[Luckyo]

Thanks for posting this, it makes for a good sanity check for what I've been hearing on the topic lately. That the only things in critical shortage all GPUs capable of training AI models (which notably is not intel GPUs), and everything else is either in normal lead times or overstocked.

Re:

[DrMrLordX]

It's unlikely the fab in Ohio would have addressed that shortage.

Re: What?

[StikyPad]

Also, the time to build out is *before* demand, not after it can't meet demand, at which point it's too late. You know, unless Intel is short on this whole "integrated circuit" thing and believes it's just a fad...

6 months ago I said

[hdyoung]

I would believe it when the line was rolling out product. Called it.

Re:

[Mr. Dollar Ton]

The race to the bottom to "win" the project completed on schedule, though.

What's really going on here

[CEC-P]

The chip market is going to be even slower if China invades Taiwan. Also, chip demand has been higher than it's even been in some categories. What they really mean to say is they're waiting for the results of the next election before building in the US.

Re:

[Junta]

Or it's about as simple as it sounds: Intel isn't doing so great and the referenced categories that have high demand are not categories where Intel is considered relevant.

Waffling on a $20B chip project because of uncertainty over which administration will be in charge for a measly four years doesn't make much sense (well, unless trying to use it as leverage on one or the other candidate). Even if their favored candidate wins, that's only buying them 4 years until they'd worry about a change in administrat

Re:

[ThePawArmy]

But four years is sixteen quarters. Sixteen quarters man

Re:

[Junta]

Indeed, in the 'only the next quarter matters' mindset that plagues businesses, it's unfathomable to think about 4 years.

Though for such companies, it's *never* the right time to spend $20B on anything, so there's that.

Re:

[CEC-P]

But if you step back and think "does the world not need server, desktop, and laptop chips suddenly?" then you know everything is the typical "moving stuff around to make a fake point at the shareholder quarterly report" style of BS they're trying to push on people.

Re:

[Junta]

"does the world not need server, desktop, and laptop chips suddenly?"

To a significant extent, the world does not need those chips, and relatively suddenly too.

The impetus for all this build out more fabs was a reaction to the anomaly of the pandemic distorted electronics market/supply chain. I think we can all agree all sorts of weird anomalies contributed to the shortages (a sudden push to have everyone want to refresh at the same time, various parts of the supply chain shutting down tanking the supply).

Taking a step back, we see a number of factors that mean "Intel doesn't

Re:

[Misagon]

Just so you know: China will invade Taiwan if Trump wins.
Because they know that Trump does not care about world politics, and that will give them free rein.

Re:

[ThePawArmy]

Stop trying to prove to the world that female comics aren’t funny.

Re:

[MacMann]

Just so you know: China will invade Taiwan if Trump wins.
Because they know that Trump does not care about world politics, and that will give them free rein.

Trump? You mean Donald J. Trump? I believe you are mistaken. He's the guy that responded to some threat out of North Korea by telling them his red button to launch nuclear weapons is bigger than theirs, and it works.

Trump might not care much for world politics but he understands that businesses need what Taiwan sells to make money, and Trump doesn't like bullies. Trump might be a bully himself but I saw him back down from talking about how the new Navy aircraft carriers were a waste of money when a Navy

Re:

[G00F]

China will likely fear rash decisions trump would do, he would goto war even if it was only his ego on the line.

If china doesn't invade in the next 2-3 years it will lose the opportunity as all the other nations in the area are ramping up preparing for china to start a war.

As badass as USA is in war, and as inept the china one is, USA is spread across the globe, china isn't. And modern war depends on chips out of that region of the world. We need fabs (and factories) in NATO counties.

If china invaded USA w

Re:

[Anonymous Coward]

When China invades Taiwan, it will change a lot of things. With how things are now, if Taiwan was hit and China embargoed the West, the entire Western economy would be shot completely, and Intel isn't going to be helping much because their focus is growing their lot in China's, perhaps Russia's economy.

What should have been done with the CHIPS act was to mandate that by a certain day, something would be coming out of that plant by a certain time, or else fines happen. That way Pat doesn't just do a ground

Re:

[RitchCraft]

China will not be invading Taiwan anytime soon. The state of China's military is more than likely on par with Russia's. Just like Ukraine, Taiwan would expose China's weaknesses and Xi would have a real problem on his bloodied hands. China needs to uphold its paper tiger image.

Re: What's really going on here

[drinkypoo]

Their equipment might be crap but they don't have the personnel shortage problem...

Grant Money

[bill_mcgonigle]

Is this corporate welfare or does this grant money provide an ownership stake in the plant with dividends?

Intel isn't a small business looking to get out of the startup phase.

Maybe they should remove the IME from the die and care about power so people want to use their chips.

Re:

[nightflameauto]

Intel doesn't like the "slow rollout of government grants" so it is holding the jobs hostage until either the State or Federal government will speed up the funds.

100% this. I'm not sure what reasoning will happen once the grant money makes it into Intel's coffers, but I look for them and other big industry players to come up with reasons to not follow through once the money is in their hands. Because our government pretends to not notice that other industries have done the same time and again. Telcos would be one of the big culprits. "Just give us more money, we'll build out high-speed networks." A few years later, "Oh, right, well, we didn't have enough money. If y

y'all missed the most important part

[Snotnose]

amid market challenges and the slow rollout of U.S. grant money

In other words, "if you don't give us that sweet sweet corporate welfare we may never open this factory".

Having been through a bunch of these....

[kalpol]

Fab promises are meaningless until they start moving equipment in. Buildings are cheap, but if the equipment begins showing up you can be reasonably sure they will go through with it.

Slow sales of North bridge controllers

[ac0000]

I need new cheap video card 4070 SUPER or faster, I don't care about Intel or AMD they are just a mere North Bridge controllers for me. They just make motherboard more expensive, it is time to integrate Intel into motherboard already. If NVidea start building its own production facilities in North America that would be a good news.

Tech junkies

[Fons_de_spons]

Told this would happen during the chip shortage, when new fabs were announced every month. Responses were ... very emotional. Figured out that there is such a thing as tech addicts and that some people were experiencing mild withdrawal effects.

Doublespeak

[CAIMLAS]

This is just doublespeak for "we're not aligned with the market". There's plenty of demand, just not for their lackluster products.

Intel's lunch is being eaten by AMD. Nobody needs or wants another Intel processor right now - in part because the AMD CPUs are better, but also because the GPU capabilities of AMD chips far exceed Intel's.

GPU capabilities are where the future is. We're even seeing some fledgeling companies claim they can fully emulate x86 "natively" within a GPU at no performance loss (forget t

Trade is getting more regional.

[MacMann]

I've been watching some videos from Peter Zeihan lately and he's been talking about how trade is shifting from being global to regional. We might not be able to get microchips from Asia soon if things keep going as they are.

We have threats to the Suez Canal from what is going on in Southeast Asia and Africa. We have threats to the Panama Canal from drought and/or mismanagement. As much as people claim the Arctic is opening up to allow trade that's still a hostile place that's largely controlled by Russia

Ohio is an infamous mark.

[Eunomion]

Their oligarchic, quasi-elected state government is constantly handing out billions of dollars to corporations to build factories, and only a few of them actually do so. And only a few of those actually build them up to the levels promised. Meanwhile the politicians who ink the deals walk away with loads of under-the-table cash.