Intel to delay Ohio plant citing slowdown in demand for chips, shares tumble

Intel experienced a decline in its shares during extended trading following a report by the Wall Street Journal revealing a delay in the construction of a highly anticipated $20 billion chip facility in Ohio.

Originally aiming for production to commence in 2025, Intel now faces a setback, with the facility unlikely to be operational until late 2026, as per the newspaper’s findings. Delays are attributed in part to the gradual allocation of funds from the CHIPS and Science Act, a legislation passed in 2022 to rejuvenate the US chipmaker industry.

While Intel did not provide specific details regarding the project’s timeline, the company affirmed its commitment to the initiative, stating that it is still progressing and has achieved significant milestones.

Reports suggest that the US is poised to announce substantial chip grants by the end of March, with the goal of channeling billions of dollars to semiconductor manufacturers. Intel has previously indicated that the pace of its expansion projects, including the Ohio facility, which is projected to become the world’s largest, depends on the grants and business conditions.

In response to the news, Intel shares saw a decline of up to 3.1 per cent, reaching $42.01 in late trading on Thursday. Even before this drop, the shares had already experienced a 14 per cent decrease since the beginning of the year.

(With inputs from agencies)