Last updated: February 1, 2024 at 8:11pm ET
First Published: February 1, 2024 at 7:40pm ET
Intel shares fell in after-hours trading Thursday after the Wall Street Journal reported that the start of production at the company's new $20 billion manufacturing plant in Ohio will be delayed by at least a year.
Intel confirmed the report and said it would not be able to meet its “aggressive” goal of starting production in 2025. Intel did not reveal a new schedule, but the magazine reported that the facility likely won't be completed until the end of 2026, with production starting then. Once the equipment is installed…
Intel shares fell in after-hours trading Thursday after the Wall Street Journal reported that the start of production at the company's new $20 billion manufacturing plant in Ohio will be delayed by at least a year.
Intel confirmed the report and said it would not be able to meet its “aggressive” goal of starting production in 2025. Intel did not reveal a new schedule, but the magazine reported that the facility likely won't be completed until the end of 2026, with production starting then. Once the equipment is installed. The report cited market challenges and slow deployment of federal aid as reasons for the delay.
Inter said in a statement that construction has been underway since 2022 and that there have been “no recent changes to the pace of construction or anticipated schedule.” The company noted that construction schedules for semiconductor manufacturing facilities typically take three to five years after groundbreaking.
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Shares fell about 1% in after-hours trading following the report. The stock has risen 44% in the past 12 months, outpacing the S&P 500's SPX, which has risen 17% over the past year.
Cantor Fitzgerald analyst CJ Muse said in a note that the postponement “changes nothing” to Intel's outlook and will not affect Intel's capital spending budget. “I think tonight's news is likely to be political,” he said, intending to put pressure on the U.S. Department of Commerce about subsidies.
Intel announced plans two years ago to build the facility, which it hopes will become the world's largest chip manufacturing hub.
“We helped create Silicon Valley, and now we're building Silicon Heartland,” Intel CEO Pat Gelsinger said at the time.
Intel said there are currently about 800 construction workers on site, with “several thousand” expected to be on site by the end of this year. The facility will eventually employ 3,000 people and mark the largest private investment in Ohio history.
Intel has been increasing its domestic manufacturing capabilities in recent years to free itself from Asian supply chain risks. The company is expanding its facilities in Oregon and Arizona, and last week opened a new factory in New Mexico.
