Delay in CHIPS Act stalls Intel’s Ohio semiconductor plant


The ground-breaking of Intel’s proposed facility at Ohio, a US $20 billion semiconductor factory has been stalled by the chip-manufacturing company, a fall-out of the delay of Creating Helpful Incentives to Produce Semiconductor or CHIPS Act, said a statement released by the company Thursday, June 24.

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

“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,” Intel revealed.

The IT giant, however, maintains it still plans to begin construction on the project in New Albany near Columbus, Ohio, this year, and manufacturing by 2025.

In early June, the European Chips Act enacted in February 2022 helped Intel bag Euro 2.72billion (US $ 2.91 billion) from Germany’s federal budget for setting a silicon junction at Magdeburg, which is expected to provide a boom to the Saxony-Anhalt belt’s economy, with more than 3,000 permanent jobs and 7,000 temporary ones. The EU Chips act funding is pinned at 40 percent of the total cost of the project.

The EU Chips Act was enacted in February 2022 with Euro 43billion (US $46 billion) earmarked to encourage tech industry investment and development. Germany has been one of the biggest beneficiaries of the act. Intel is also set to invest heavily in Ireland, and several smaller project across Europe in France, Spain, Italy and Poland.

The US CHIPS Act, on the other hand, was introduced in the house in the year 2020, for investments and incentives to support US semiconductor manufacturing, research, development and supply chain security.

The US Senate passed a version of the bill last year, but it has yet to get approval from President Joe Biden.

The bill provides an income tax credit for semiconductor equipment or manufacturing facility investment through 2026, and also establishes a trust fund to be allocated upon reaching an agreement with foreign government partners to promote consistency in policies related to microelectronics, transparency in microelectronic supply chains, and alignment in policies towards nonmarket economies.

The necessity of such a bill was aggravated by the fact that world over, countries are struggling to meet the demand for chips, majority of which are produced in Taiwan, under Chinese control and is impacting millions of devices, cars and appliances.

In the United States, the chip foundries have come down to mere 12 percent from the 37 percent in 1990, largely because other countries, mainly China was providing huge investment support and incentives.

Earlier this year, Keyvan Esfarjani, Intel senior vice president of Manufacturing, Supply Chain and Operations, had said that the “scope and pace of Intel’s expansion in Ohio, however, will depend heavily on funding from the CHIPS Act.”

Intel in January announced to invest more than $20 billion to build two new factories in the US for advanced chipmaking, as the world grapples with a semiconductor shortage.