Jun 23, 2022 - Technology

Frustrated with Congress, Intel delays chips groundbreaking ceremony

Illustration of a US flag made of semiconductor chips.

Illustration: Shoshana Gordon/Axios

Intel is postponing a groundbreaking ceremony to celebrate its planned $20 billion chip site in Ohio, as Congress stalls on passing a package meant to boost investment in the domestic semiconductor industry.

Why it matters: The delay signals Intel's frustration with Congress' lack of movement on the $52 billion in funding, which the company has said will impact its expansion.

Driving the news: Intel told Ohio lawmakers on Wednesday it was delaying the July 22 event "due in part to uncertainty around" the chips legislation, according to the Wall Street Journal, which first reported the news.

  • The company hasn't pushed back the start of construction and still plans to build, according to the Journal report.
  • An Intel spokesperson noted that when the company announced its Ohio project earlier this year, it said the "scope and pace of our expansion" will depend heavily on funding from Congress from the CHIPS Act.

What they're saying: "Unfortunately, CHIPS Act funding has moved more slowly than we expected and we still don’t know when it will get done," an Intel spokesperson said in a statement.

  • "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 U.S. semiconductor manufacturing leadership and build a more resilient semiconductor supply chain."

The big picture: Companies are stepping up the pressure on lawmakers to pass the legislation, now known as the Bipartisan Innovation Act, that includes the $52 billion in funding for domestic manufacturing.

  • The issue has increased urgency thanks to the pandemic-induced global chip shortage, with the Commerce Department warning earlier this year that U.S. companies relying on key chips have a five-day supply.
  • GlobalFoundries, which is exploring expanding a manufacturing site in New York, told the Washington Post that the funding would affect the rate and past it invests in increasing U.S. manufacturing capacity.

What's next: Lawmakers are working toward a compromise on House and Senate versions of the legislation as the August recess looms.

  • "Every day we waste by not passing the CHIPS Act funding is another day we fall further behind in our competition with China," Rep. Tim Ryan (D-Ohio), said in a statement.
  • "This partisan gridlock has now caused a delay of a $20 billion economic shot in the arm for Ohio. It’s time our leaders in Washington find the courage to put aside their differences and ensure our country has a fighting chance at dominating the industries of the future.”

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