Intel has delayed the production start of its new Ohio fabrication plants from 2025 to 2030 amidst significant losses of $18.8 billion in 2024. This cautious approach aims to align with market demand. The company is also scaling back on international projects, including a reduction in its expansion in Malaysia and delays in Germany and Poland plans, in response to lower-than-anticipated demand.
Intel Corporation, the American semiconductor manufacturer, has announced a delay in the construction and operation of its new fabrication plants in Ohio. Initially scheduled to commence production in 2025, the timeline has now shifted to 2030. The company emphasized a cautious strategy, aligning production schedules with market demand. Naga Chandrasekaran, general manager of Intel Foundry Manufacturing, conveyed to employees, “It’s important that we align the start of production of our fabs with the needs of our business and broader market demand.”
Amidst these setbacks, Intel reported a staggering net loss of $18.8 billion for the entirety of 2024. With the rise of artificial intelligence technologies, Intel is striving to secure a competitive position within this rapidly evolving market. Nevertheless, the company faces significant challenges as it competes against formidable rivals such as TSMC and Samsung in the semiconductor sector.
Additionally, the unexpected rise of Nvidia as a leading provider of AI chips has put further pressure on Intel. The company’s CEO, Pat Gelsinger, was dismissed in December due to diminished confidence in his strategic vision. This leadership change occurred shortly after Intel announced a substantial job reduction plan and paused numerous construction projects, highlighting the severity of its operational challenges.
Amid the ongoing turmoil, the Biden administration allocated $7.9 billion to support Intel’s semiconductor production in the United States. However, Intel is also scaling back its expansion plans in Europe, specifically delaying projects in Germany and Poland due to unexpectedly low demand. Furthermore, the company has decided to reduce its investment and development efforts in Malaysia, underscoring the global shifts in its operational strategy.
Intel’s decision to delay the production timeline for its new chip manufacturing plants illustrates a cautious approach amid significant losses and intense competition in the semiconductor market. With a reported net loss of $18.8 billion, the company’s struggle to adapt to the evolving landscape, especially concerning artificial intelligence technology, remains a pivotal issue. Leadership changes and strategic adjustments in both domestic and international expansions further reflect the company’s challenging position and efforts to regain its competitive edge.
Original Source: www.malaymail.com
