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Intel withholds Ohio fab ceremony over US chip subsidies inaction

$20b factory construction start date unchanged – but the x86 giant is not happy

Intel has found a new way to voice its displeasure over Congress' inability to pass $52 billion in subsidies to expand US semiconductor manufacturing: withholding a planned groundbreaking ceremony for its $20 billion fab mega-site in Ohio that stands to benefit from the federal funding.

The Wall Street Journal reported that Intel was tentatively scheduled to hold a groundbreaking ceremony for the Ohio manufacturing site with state and federal bigwigs on July 22. But, in an email seen by the newspaper, the x86 giant told officials Wednesday it was indefinitely delaying the festivities "due in part to uncertainty around" the stalled Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act.

That proposed law authorizes the aforementioned subsidies for Intel and others, and so its delay is holding back funding for the chipmakers.

Intel spokesman Will Moss told The Register today that the postponed groundbreaking event "has not been rescheduled," meaning there's no new date for it, and the company hopes to still hold it "at some point." We asked if the holding of the event is contingent on the CHIPS Act passing, and he said, "I don't have an answer for this."

Crucially, Moss told us the construction start date for the Ohio manufacturing site, which Intel originally set for late 2022, has not changed.

However, in a company statement he provided, Intel repeated a quote it made when the Ohio fab site was announced in January, saying that "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," the statement added. "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."

While Intel has vowed to spend $20 billion to build two leading-edge chip factories on a site near Columbus, Ohio, the super-corp said its investment "could grow to as much as $100 billion over the next decade," which depends in part on the federal chip subsidies.

What is not clear is how inaction over the CHIPS Act could impact Intel's timeline for the Ohio site. Intel CEO Pat Gelsinger has previously said that the legislation would "enable me to go bigger and faster than the bold commitments that we have already made."

Gelsinger did apparently tell lawmakers recently that Intel would prioritize construction projects in other countries that have already approved subsidies, WSJ reported, citing sources. This could be in reference to the €6.8 billion ($7.3 billion) in funding Germany's government has approved for the massive chip manufacturing campus Intel is planning there.

Intel sent the warning shot about the Ohio fab mega-site Wednesday after Gelsinger and the CEOs of more than 100 other tech companies urged the two chambers of Congress last week to reach consensus on the long-stalled chip subsidies bill.

The Senate and the House of Representatives have been attempting to work out differences in their respective versions of the bill, but there are concerns that such efforts are petering out. This has been a protracted deliberation, given that the House passed its version in February and the Senate passed its version all the way back in June 2021.

Gelsinger made his dissatisfaction known about Congress' stalled efforts when he appeared at a committee hearing in late March.

"We've already wasted several quarters since the Senate acted last year, and now it's time for us to move forward rapidly," he said at the time. ®

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