State and local officials are responding to the news that Intel is slowing construction at the two chip fabricating plants it's building in New Albany.
In a statement Friday, Gov. Mike DeWine said, "While the pace of construction in Ohio may not be as fast, Intel has affirmed its commitment to Ohio as the new leadership of the company makes adjustments to its long-term strategy."
Kenny McDonald, the president and CEO of the economic development group One Columbus, said in a statement, “Timelines in complex manufacturing can shift, but the strategic necessity doesn’t. Our state and local partners signed on for the long haul because bringing next-generation semiconductors home is mission-critical for U.S. competitiveness and security.”
On Thursday, Intel CEO Lip-Bu Tan told employees and investors the company would be further slowing construction on the $28 billion New Albany project as the company restructures.
Tan said that Intel is taking a fundamentally different approach to building its foundry business and will be "judicious and disciplined as we allocate capital."
Tan said the company invested too much, too soon in recent years without adequate demand.
"We remain deeply committed to investing in the U.S., where we will apply the same level of financial discipline," Tan said. "To that end, we are further slowing construction in Ohio to ensure our spending is aligned with demand, while maintaining flexibility to accelerate based on new customer wins."
Tan said Intel is laying off 15% of its global workforce.
The state of Ohio has already distributed $600 million in grants to Intel. The state offered Intel $2 billion in incentives to secure the project for New Albany and Licking County.
In a statement, the city of New Albany said, "Intel has reaffirmed its commitment to Ohio, and the City of New Albany remains encouraged by the company’s continued investment in our region. We continue to follow Intel’s strategic decisions closely and remain committed to supporting the Ohio One campus in New Albany and the role it will play in driving innovation, job creation and economic opportunity in our region."
WOSU also contacted New Albany Mayor Sloan Spalding on Friday. Spalding said city officials were still trying to figure out what is going on.
Spalding called the Intel site an active one. "Find me another construction site in Ohio with 23 cranes on it," he said.
Tan made his comments as the company reported second-quarter financial results.
Tan also said the company has decided not to move forward with previously planned projects in Germany and Poland.
The company also plans to consolidate assembly and test operations in Costa Rica to larger sites in Vietnam and Malaysia.
"There are no more blank checks. Every investment must make economic sense," Tan said.
Intel had already delayed the New Albany project's opening. The facilities were originally supposed to open this year.
In February, Intel announced further delays. The company pushed the date to finish one fabrication plant to 2030 and the second plant to 2031.
Tan wasn't clear on how long the construction slowdown could further delay the plants' openings.
Intel said in February it had spent $3.7 billion through last year in building the New Albany plants and the company had an additional $3.2 billion committed toward work that was already underway.
In November, the Biden administration said it was releasing $7.865 billion in CHIPS act grant money for Intel projects in New Albany and three other states. That includes $1.5 billion for the New Albany project.
Intel has struggled to keep up with rivals such as Nvidia Corp.
Intel stock closed down more than 8% Friday to $20.70 a share.
