intel's $1.5 billion ohio expansion gets green light with chips act funding
Ohio, Wednesday, 4 December 2024.
Intel has secured $1.5 billion from the CHIPS Act to advance its semiconductor manufacturing project in Ohio. This funding is part of a larger $8 billion incentive announced by the Biden Administration. The investment will accelerate the construction of two state-of-the-art factories in Licking County. This project is expected to create 3,000 permanent jobs and 7,000 construction jobs. The CHIPS Act, enacted in 2022, aims to strengthen U.S. semiconductor production and reduce dependency on foreign sources. This move is crucial for national security and economic competitiveness. Ohio is now positioned as a pivotal player in reestablishing the U.S. as a leader in semiconductor manufacturing. The project results from strong advocacy by local and state leaders, marking a significant milestone for the region. Intel’s expansion not only promises job creation but also attracts further investments and innovation, transforming Ohio into a high-tech industry hub.
Market impact amid leadership transition
The funding announcement comes at a critical juncture for Intel, coinciding with CEO Pat Gelsinger’s unexpected retirement on December 1, 2024[1]. Intel’s stock has faced significant pressure, declining nearly 50% in 2024[2]. The company reported a substantial $16.6 billion loss in Q3 2024, its largest ever, leading to its removal from the Dow Jones Industrial Average, where it was replaced by Nvidia[3].
Strategic restructuring possibilities
Intel’s board is actively exploring strategic alternatives, including potential private equity transactions and the possibility of splitting its factory and product-design businesses[4]. This consideration gains particular significance as the company implements cost-cutting measures, including approximately 15,000 job reductions and dividend suspension[5]. Qualcomm has previously expressed interest in Intel’s chip design business, though negotiations have not progressed[6].
Broader investment landscape
The Ohio project is part of Intel’s larger commitment to invest over $100 billion in domestic chipmaking and advanced packaging capabilities since the CHIPS Act’s passage[7]. The company maintains significant operations across the U.S., including facilities in Arizona (Silicon Desert) and New Mexico (Silicon Mesa). Intel has also pledged $100 million for semiconductor education and workforce training[8].
Technology advancement timeline
Intel continues to progress with its technological roadmap, with Intel 3 already in high-volume production. The company plans to launch Intel 18A next year, marking a significant advancement in domestic semiconductor manufacturing capabilities[9]. This development aligns with the Department of Commerce’s strategic focus on enhancing U.S. semiconductor research and manufacturing capacity[10].