- Concerns are growing among local leaders and stakeholders about the future of Intel’s Ohio project.
- Financial struggles, including declining revenue and a 57% drop in stock price, have plagued Intel in recent months.
- Intel has fallen behind competitors in the semiconductor industry, particularly in AI technology.
This was supposed to be Intel’s year.
In 2025, semiconductors were to begin rolling off production lines at the company’s first Ohio factory, which was hailed as a multibillion dollar employment and economic boon for the region.
But delays, financial struggles and a leadership shakeup have plagued the chipmaker in the years since Intel announced it was coming to Ohio.
Now, the first of Intel’s two fabs isn’t expected to open until at least 2027 or 2028. And, when the factories finally do open, its unclear whether they’ll be making chips for American-based Intel or another company entirely.
“It’s more than just noise,” said Zach Schiller, research director at Policy Matters Ohio, a left-leaning think tank with offices in Columbus and Cleveland. “They’re a troubled company at the moment —which none of us want to see— but that seems pretty evident and it’s been true for some time.”
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For most of 2024, Intel’s revenue declined, according to quarterly financial reports issued by the company.
After a 9% increase in revenue in the first three months of 2024 compared with 2023, Intel’s revenue declined by 1% in the second quarter of last year, by 6% in the third quarter and by 7% in the fourth quarter of 2024. Year over year, Intel’s annual revenue was down 2% at the end of 2024 compared to the end of 2023, according to the company’s financial reports.
Despite the financial issues, an Intel spokesperson told The Dispatch the company is moving ahead with its Ohio fabs.
“Intel is committed to building two leading-edge fabs in Ohio, and we continue to advance both fabs,” a spokesperson said via email. “We will align the start of production at each fab with market demand over the coming years.”
But as Intel’s issues continue to pile up, they’ve resulted in real drawbacks for the chipmaker.
In August, Intel cut 15,000 jobs —or about 15% of its workforce— as part of a $10 billion global restructuring designed to boost profit and improve efficiency.
Like Schiller, Greg Lawson, research fellow at right-leaning think tank The Buckeye Institute, said he’s worried about how Intel issues may impact Ohio’s fabs.
Lawson believes Ohio’s chip factories will be completed given the national security interest in having semiconductors made stateside. But, Lawson said he’s concerned Intel may not live up to its promised job creation despite the amount of taxpayer dollars that were spent to attract the company here.
“You can’t look at the headlines and not have concerns,” he said. “I think we put an awful lot on the table… You need to have easily enforceable claw backs because what happens in 10 years? Is whoever is in the governor’s mansion then really going to do that?”
Intel’s stumbles caused its stock to plummet 57% in 2024, despite vast growth in the semiconductor industry, according to the financial service Nasdaq. Intel’s stock plunged from $50.25 a share near the end of 2023 to a low of $18.89 in September 2024 before rebounding somewhat this month to $27.39 following comments from Vice President J.D. Vance about U.S. chip manufacturing.
In December, shareholders filed a lawsuit in U.S. District Court in the Northern District of California against 13 current and former Intel executives, accusing them of violating federal law by allowing the company to make misleading financial statements.
Intel CEO Pat Gelsinger abruptly stepped down Dec. 1. The company named then-Chief Financial Officer David Zinsner and senior executive Michelle Johnston Holthaus as interim co-CEOs.
Although Intel’s issues have left some local leaders concerned, Licking County Commissioner Tim Bubb said he remains optimistic despite what he described as “unsettling” developments.
“We’re painfully aware,” Bubb said of Intel’s financial problems. “Intel obviously has internal problems, capital problems and leadership problems… We’re observing from the sidelines, but we’ve got some real skin in the game here.”
Although local leaders have maintained what Bubb described as a good relationship with Intel throughout the company’s ups and downs, he said it’s difficult not knowing what may happen.
Intel has already poured more than 200,000 cubic yards of concrete and more than 20 cranes are currently operating at the site, where the basement of at least one fab is already finished.
While Intel is deep into its work on its first two Ohio factories, Schiller said it’s clear only one will be done come 2028. If that pans out, Schiller said the Ohio Department of Development should make sure it enforces its agreement with the company, which states $300 million in grants are available to help with the construction of each factory completed by the end of 2028.
“Ohio’s stance has not changed,” said Dan Tierney, spokesman for Gov. Mike DeWine. “The project is moving forward, and the lion’s share of incentives are performance based, meaning the company does not receive the incentive until benchmarks are met.”
In preparation for Intel, local governments have poured money into improving infrastructure around the factory site. At the same time, schools and universities have begun revamping programs to better train the workforce Intel will need in New Albany.
Between all of that work and the ongoing construction of the company’s fabs, Bubb said he thinks Intel is too far along to turn back now. But, he questioned whether the scope of the economic development Intel initially promised Ohio would actually pan out in the end.
“When it was announced, Intel was the grand slam that just sort of came out of the clouds,” Bubb said. ” Now it’s not certain when and if Intel is going to be hiring that workforce…All I’m doing is reinterring the same questions everyone else is asking.”
Intel’s stumbles have even galvanized a coalition called Chips Communities United to pressure the company to make good on its investments after receiving $7.86 billion in funding from the federal CHIPS and Science Act. Intel received the most funding of any semiconductor company from the law and planned to make investments not just in Ohio but also in New Mexico, Arizona and Oregon.
Officials should also require Intel to annually report the number of jobs its Ohio plants have created along with other metrics such as capital invested, said both Schiller and Bailey Sandin, work and wages fellow at Policy Matters Ohio.
“This isn’t just a central Ohio issue,” said Sandin, who is also part of Chips Communities United. “This is something that’s going to impact the entire state and it could easily get left behind if the necessary precautions aren’t taken.”
Further complicating Intel’s fiscal problems is the fact that it has fallen behind its closest competitors. Chipmakers Advanced Micro Devices, Inc., NVIDIA, and Taiwan Semiconductor Manufacturing Co. have all pulled ahead of Intel, which largely exited the smartphone market years ago, said Brady Wang, associate director at Counterpoint, a Hong Kong-based technology market research firm Counterpoint
At the same time, Intel has also lagged competitors when it comes to artificial intelligence, said Jeongku Choi, senior analyst at Counterpoint.
While investing in new leading-edge fabs in Ohio could help Intel rebound, Choi said the company still has a lot of catching up to do. And as demand for chips in AI and data centers picks up, Choi and Wang said Intel will struggle to compete for now.
“Intel is really behind its competitors in the GenAI chip market…Manufacturing technology has to improve,” Wang told The Dispatch. “Investing in leading edge fabs is a no-brainer to survive. It‘s the only way to regain the confidence of their customers.”
In recent weeks, some of the companies Intel has failed to keep up with have gone so far as to express interest in buying part or most of the company.
Broadcom is eyeing Intel’s chip design and marketing business while TSMC —the world’s biggest contract chipmaker— has looked at possibly controlling some or all of Intel’s chip plants, the Wall Street Journal reported in early February. President Donald Trump has also asked TSMC to consider taking a controlling interest in Intel, Bloomberg has reported.
San Diego-based Qualcomm has also considered buying Intel, Reuters reported in September. And rumors have swirled about whether Elon Musk, the world’s richest man and leader of Tesla and SpaceX might be interested in buying Intel.
While a potential merger or purchase could complicate Intel’s future, Bubb said it could be just what the company needs. If the right company buys Intel, it could get the chipmaker on the proper financial footing and position Ohio’s fabs to make the most technologically advanced semiconductors in the world.
“The question really gets to be: who will operate them?” Bubb said. “Maybe, it will be a company that is more in the game. Maybe it has to happen…Potentially, it’s a positive.”
@MaxFilby