Shares of Intel Corp. slipped in extended trading Thursday after the Wall Street Journal reported that the start of production at the chip maker’s new $ 20 billion manufacturing plant in Ohio will be delayed by at least a year.
Intel confirmed the report, saying it will not meet its “aggressive” goal of commencing production in 2025. Intel did not provide a new timeline, but the Journal reported that the facility will likely not be completed until late 2026, with production beginning after that once equipment is installed. The report cited market challenges and the slow rollout of federal grant money as reasons for the delay.
In a statement, Intel said construction has been ongoing since 2022 and that it has “not made any recent changes to our pace of construction or anticipated timelines.” The company noted that construction timelines for semiconductor-manufacturing facilities are typically three to five years after groundbreaking.
Intel stock INTC, +0.65% fell about 1% in after-hours trading following the report. Shares have soared 44% over the past 12 months, outpacing the S&P 500’s SPX 17% gain over the past year.
Cantor Fitzgerald analyst C.J. Muse said in a note that the delay “doesn’t change a thing” for Intel’s outlook, and won’t have an effect on Intel’s capex budget. “We think the news tonight is likely political,” he said, and intended to pressure the U.S. Commerce Department on subsidy grants.
Intel announced plans to build the facility two years ago, with the expectation that it would be the world’s largest chip-manufacturing site.
“We helped to establish the Silicon Valley, now we’re going to do the Silicon Heartland,” Intel Chief Executive Pat Gelsinger said at the time.
Intel said it currently has about 800 construction workers on the site, and expects to have “several thousand” there by the end of this year. The facility is eventually expected to employ 3,000 people and mark the largest private-sector investment in Ohio history.
Intel has been bolstering its domestic manufacturing capabilities in recent years, in an effort to break free of Asian supply-chain risks. It is expanding facilities in Oregon and Arizona, and last week opened a new factory in New Mexico.