Intel Delays Groundbreaking Ceremony for Ohio Plant Amid Uncertainty Over Chips Legislation

Intel still plans to build the facility and hasn’t pushed back the start of construction, said Intel spokesman

Will Moss.

Intel, which announced the plant plans in January, said it intended to invest at least $20 billion in the Ohio facility, with construction expected to begin in late 2022 and production to start in 2025.

The company said in its announcement that spending on the Ohio project could reach around $100 billion over the next decade, but that the expansion depends in part on progress on the U.S. chips legislation.

While the groundbreaking is ceremonial, the decision to delay is a sign of Intel’s frustration over the chips legislation, which includes about $52 billion in funding for expanding domestic semiconductor production and research and development. House and Senate negotiators are considering the funding, often referred to as the CHIPS Act, as part of broader proposed legislation on innovation that proponents say is necessary for national security. Intel has been lobbying heavily for the legislation.

Mr. Moss said the company remains excited to begin construction on the Ohio manufacturing plant, but he reiterated the company’s statement in January that the scope and pace of Intel’s expansion in Ohio will depend heavily on funding from the chips legislation.

“Unfortunately, CHIPS Act funding has moved more slowly than we expected and we still don’t know when it will get done,” he said, calling on Congress to act so Intel “can move forward at the speed and scale we have long envisioned for Ohio” and other U.S. projects.

President Biden has repeatedly pointed to the Ohio investment as a key manufacturing development and an indicator of the U.S. taking a larger role in the global semiconductor industry. The president mentioned the company’s planned investment in his State of the Union address and has met in person with Intel CEO

Pat Gelsinger.

Intel has told lawmakers recently that it would prioritize construction in other countries that have already approved incentive packages for new facilities, according to a person familiar with the company’s communications. The company, earlier this year, announced plans for multibillion-dollar investments in Europe.

Europe is pressing forward with a plan for a package of incentives and investments worth 43 billion euros. The goal is to roughly double Europe’s share of global chip production to 20% by 2030.

Mr. Gelsinger has pointed out to Biden administration officials and lawmakers that Europe appears to be moving more quickly than the U.S., according to a person familiar with the matter.

The push for government funding by Intel and other chip companies comes amid growing concerns in the U.S. and Europe that the crucial industry’s supply chains are too concentrated in Asia. The Covid pandemic disrupted supplies and contributed to a global chip shortage that highlighted the increasing importance of chips from an economic and national-security perspective.

The bipartisan funding for chips in the U.S., however, hasn’t moved through Congress as quickly as many industry executives hoped. Chip companies now aren’t confident that it will be in place before the midterm elections in November, according to people familiar with the matter.

Intel has been joined by its two main Asian rivals in building new factories in the U.S. in recent years: Taiwan Semiconductor Manufacturing Co., which is constructing a new plant in Arizona, and

Samsung Electronics Co.

, which is building a factory in Texas. Neither of those companies has announced changes to plans despite the pace of government funding.

Intel, too, is expanding beyond the new Ohio plant. It is building large new factories in Arizona and Germany, and upgrading facilities in New Mexico, among other moves. They are a key ingredient in Mr. Gelsinger’s bid to revitalize Intel after it fell behind technologically to TSMC and Samsung in the race to make the fastest computer chips with the smallest possible transistors.

—Alex Leary contributed to this article

Write to Ken Thomas at ken.thomas@wsj.com and Asa Fitch at asa.fitch@wsj.com