Intel ‘Playing Politics’ Over Delayed Ohio Chip Factory, Alleges Governor

Intel’s decision to delay construction of a chip factory in Ohio has drawn a reaction from the Republican governor of that US state.

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

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.

Ohio factory delay

But last month Intel signalled that Ohio chip factory could be delayed, or even scaled back, as the chipmaker waits for the US Congress to decide upon the US Chips Act.

Intel cancelled a 22 July groundbreaking ceremony at the Ohio site.

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.

According to CNBC, Senator Minority Leader Mitch McConnell recently threatened new obstacles to the Chips Act passage.

And the same publication reported on its exclusive interview with Ohio Governor Mike DeWine, who said Intel’s delay the chip plant is about gaining ‘leverage’ with the US Congress.

Despite this, Gov. DeWine still has high hopes that Intel will proceed with the factory.

“I truly believe that this is the Midwest’s time. I believe it’s Ohio’s time,” DeWine reportedy said.

“The idea of delaying a ceremonial announcement, this sucks,” Intel CEO Patrick Gelsinger told CNBC’s Sara Eisen during an appearance Wednesday at the Aspen Ideas Festival.

But Gelsinger said without the legislation – and the aid – it does not make sense to move forward yet.

“It is a huge signal to the industry, to the tech community and to the world that the US is serious about building this industry on American soil,” Gelsinger said.

Negotiating tactic?

But Ohio’s DeWine has reportedly suggested the delay is a negotiating tactic by Intel to get the legislation passed.

“I don’t think they wanted to be in a position where they would say to Congress, we’re breaking ground, and Congress still hadn’t passed the Chips Act,” he said. “I think it’s a little bit of maybe leverage or a little bit of, hey, let’s pay attention to this.”

DeWine reportedly said he has received assurances from former colleagues on both sides of the aisle that the law will be passed soon.

And he said Intel has always told state officials that the scope of the project depended on the Chips Act funding.

DeWine said Intel told his team that the Chips Act funding would be the difference between a $20 billion project built over several years, and an $80-100 billion investment “within a relatively short period of time.”

“But they also said, ‘Look, if we don’t have the Chips Act, we just can’t do that. We’re coming to Ohio, but we’re not going to roll nearly as fast.’”

European investment?

Intel’s Gelsinger meanwhile confirmed that the chip giant is still committed to Ohio, but he said the scope of the project depends on whether the legislation passes.

“When we did the announcement, we said we’re either going to go slow and small, or we’re going to go big and bold,” he reportedly said.

At Aspen, Gelsinger indicated more investment could shift to Europe if the US Chips Act is not passed, which would be music to the European Union’s ears.

One potential stumbling block for Intel in Ohio, especially for its female staff members, is the fact that this US state has a strict ban on abortions after six weeks of pregnancy, which was signed into law by Governor DeWine in 2019.

With the recent the Supreme Court ruling that controversially overturned Roe vs. Wade, that Ohio abortion ban is now in force.

According to CNBC, Intel declined to comment on the law, except to reiterate its commitment to pay for out of state travel for employees needing reproductive care.