Intel postpones $20 billion Ohio project due to weak chip market

© Reuters. This undated handout image renders Intel’s semiconductor factory currently under construction in New Albany, Ohio, USA. Intel/Handout via REUTERS

(Reuters) – Intel is delaying the construction schedule of its $20 billion chip manufacturing project in Ohio due to market issues and delays in U.S. subsidies, the Wall Street Journal reported on Thursday.

The initial schedule was for chip manufacturing starting next year. Construction of the current manufacturing facility is not expected to be completed until the end of 2026, the report said, citing people involved in the project.

Shares of the chipmaker fell 1.6% in extended trading. There was no immediate response to Reuters’ request for comment.

The company late last month forecast first-quarter sales below market expectations due to uncertain demand for chips used in traditional server and personal computer markets.

This comes as a result of a shift in spending on AI data servers, dominated by rival Nvidia (NASDAQ:) and ambitious AI rival Advanced Micro Devices (NASDAQ:), and to traditional server chips, a key data center offering from Intel (NASDAQ:). demand has decreased. .