Intel Signals Delay To Ohio Factory Over US Chips Act Dispute

Intel has issued a stark warning to US authorities over slow funding associated with the new US legislation designed to encourage the building of new chip factories in the United States.

According to CNBC, Intel has warned that a massive new chip factory in Ohio currently undergoing early stage construction could be delayed, or even scaled back, as the chipmaker waits for the US Congress to decide upon the US Chips Act.

It was back in January this year when Intel announced it would construct the world’s biggest silicon manufacturing complex near Dayton, Ohio.

US Chips Act

Intel estimated construction of the facility would cost up to $100 billion (£73bn) over ten years, and it committed an initial investment of $20 billion.

But now it is reported that issues with the US Chips Act could impact the arrival of this new facility, in a world that has been struggling to deal with the global chip shortage in recent years.

The facility is expected to be the most significant expansion of US-based semiconductor manufacturing in years.

The US Chips Act was approved by the US Senate in March this year, but has yet to be signed into law.

The Chips Act sets aside $52 billion to significantly boost American semiconductor production and research over five years.

The semiconductor funding is just one part of a broader package that must make its way through the negotiation process.

But CNBC reported that the Chips Act has been stalled as lawmakers seek to work out differences between two competing versions of legislation.

Intel warning

And Intel is not happy.

“We are excited to begin construction on a new leading-edge semiconductor manufacturing plant in Ohio and grateful for the support of Governor DeWine, the state government and all our partners in Ohio,” an Intel spokesperson was quoted as saying in a statement.

“As we said in our January announcement, the scope and pace of our expansion in Ohio will depend heavily on funding from the Chips Act.”

“Unfortunately, CHIPS Act funding has moved more slowly than we expected and we still don’t know when it will get done,” said the Intel spokesperson.

“It is time for Congress to act so we can move forward at the speed and scale we have long envisioned for Ohio and our other projects to help restore US semiconductor manufacturing leadership and build a more resilient semiconductor supply chain.”

National security

Intel had reportedly been seeking subsidies from the US government from the Chips Act.

The chipmaker spokesperson confirmed Intel was still committed to the $20 billion investment it announced earlier this year, but the larger $100 billion investment is uncertain if the Chips Act isn’t passed by Congress.

Intel CEO Pat Gelsinger was reportedly in Washington DC on Thursday to discuss the bill with lawmakers.

Groundbreaking for the Ohio factory is still scheduled for the Autumn, according to the Intel spokesperson.

The Ohio factory is keenly wanted by the Biden Administration, as it seeks to ramp up US chip production for national security purposes.

Most manufacturing of high-end chips currently takes place in Taiwan and South Korea, and US officials say that increasing the amount of semiconductors fabricated on U.S. and European soil is important for national security.

Earlier this year Intel’s Gelsinger spoke about the strategic importance of semiconductor fabrication plants (fabs).

Gelsinger pointed out that for the past five decades oil reserves defined geopolitics, but he believes semiconductor fabs are now equally important.