Grappling with a series of operational challenges, Intel has been weighing options to stem losses, with cost reduction being one of its major focus. Under this scenario, the decisions the semiconductor giant has made include slashing 15% of its workforce and the cancellation of its 20A process, which can help avoiding the significant capital expenditures needed to scale the node to full production.

In addition to the aforementioned moves, rumors have been circulating regarding the progress of Intel’s global expansion, hinting that the projects at Germany and Penang might be put on hold. Moreover, though granted with USD 8.5 billion in grants and USD 11 billion in loans under the Chips and Science Act, the company has not yet received any money from the U.S. authority, raising concerns on the feasibility of its ongoing Arizona and Ohio projects.

Here is a roundup of Intel’s major expansion projects which have been reportedly delayed, scaling down, or put on hold recently, as cost considerations may be the primary reason.

Accompanied by construction crews on Oct. 12, 2023, Intel CEO Pat Gelsinger toured the company’s two new fabrication plants being built in Chandler, Arizona. (Credit: Intel)

US: Ohio Delayed for 2 Years, with Mass Production Expected in 2027-28

Intel plans to invest USD 100 billion over the next five years in new fabs and expansions across Arizona, New Mexico, Ohio, and Oregon, creating 10,000 manufacturing jobs and 20,000 construction jobs.

However, according to a previous report by The Register, the construction of Intel’s two fabs in Arizona has progressed more slowly than anticipated. Rising costs for materials and labor, combined with a surge in investments in the state, have resulted in a shortage of workers.

Citing Nikkei, the report notes that the cost of constructing a plant in Arizona is now four to five times higher than in other regions, such as Asia, and several times more than the initial budget Intel had anticipated.

The semiconductor giant’s Fab 52 and Fab 62 in Arizona are previously scheduled to be completed in 2024. However, The Register notes that the schedule may be delayed a bit, as the fabs are likely to begin operations later this year or in early 2025, targeting to manufacture chips using Intel’s next-generation Angstrom-era process technology, including the 18A node.

The 20 billion project in Ohio, on the other hand, may be facing larger obstacles as Intel has delayed the plan due to market downturns and delays in U.S. subsidies.

With an initial plan to begin chip manufacturing in Ohio in 2025, the company has now postponed the pipeline, aiming to complete the two fabs in 2026–2027, with operations expected to commence around 2027–2028.

EMEA: Hard-hit Area as Investments on Hold in Israel, France and Italy

The situation is not too optimistic in Europe, neither. According to a report from global media outlet Volksstimme, the construction of Intel’s Fab 29.1 and Fab 29.2 near Magdeburg, Germany, which may totaling 30 billion euros, has been postponed due to pending approval of EU subsidies and the need to remove and reuse black soil. The date of commencement has been pushed from summer 2024 to May 2025.

It is reported that Intel’s fabs in Germany were originally scheduled to start operations by late 2027 and were expected to employ advanced manufacturing processes, potentially Intel 14A (1.4nm) and Intel 10A (1nm) nodes. However, Intel now estimates that it will take four to five years to build these plants, and production is expected to commence between 2029 and 2030.

In addition, earlier in June, the struggling semiconductor giant also put a halt to the expansion of a major factory project in Israel, which was set to invest an additional USD 15 billion in a new chip plant, according to The Times of Israel.

In December, Intel had announced plans to increase its investment in the chip manufacturing plant in Kiryat Gat, from USD 10 billion to USD 25 billion, in order to secure a USD 3.2 billion grant from the Israeli government. However, it has now suspended the plan, suggesting that “managing large-scale projects, especially in our industry, often involves adapting to changing timelines,” the report states.

It is also worth noting that Intel tends to scale down on its production in the EMEA area, as in June, the company announced the sale of a 49% stake in its plant in Leixlip, Ireland, to Apollo Global Management for USD 11 billion, securing more external funding for usage.

Another report by POLITICO in July also notes that the U.S. semiconductor giant has discreetly suspended several investment plans in Europe after incurring significant losses, dealing a setback to Europe’s push to produce more microchips.

In 2022, Intel announced an initial investment of over €33 billion for R&D and Manufacturing in EU, targeting countries including France, Germany, Ireland, Italy, Poland and Spain. However, the report suggests that the promised investments for France and Italy, valued at billions of euros and potentially creating thousands of jobs, will be put on hold for now.

Asia: New Packaging Project in Malaysia Suspended

The latest of Intel’s moves on halting its global expansion would probably be the cancellation of its new chip packaging and testing project in Penang as part of cost-cutting efforts, while the operations of existing facilities will remain unaffected.

The U.S. chip giant had announced three years ago that it would invest approximately USD 7 billion to build new chip packaging and testing facilities in Malaysia, looking to make the site its largest overseas packaging and testing base. Per a report by Malaysia media outlet The Star, Intel employs around 14,000 people in Malaysia, meaning over 2,000 local employees may face the risk of job loss.

Would the series of emergency measures taken by the struggling giant stem the bleeding? Or would these moves more like a cornered beast fighting out of its way? The only thing for sure now may be that Intel would have a pretty different look after the upcoming board meeting in mid-September.

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• [News] Amidst Rumors of Germany Plant Delay, Intel’s Penang Project Also Reportedly on Hold

As per a report from Bloomberg citing sources, it’s pointed out that TSMC’s first US fab in Arizona began producing engineering wafers using the 4nm process in April, with yields reportedly comparable to those manufactured in its Southern Taiwan Science Park facility, showing promise in meeting its targets.

Addressing on the matter, TSMC reportedly stated that the project is proceeding as planned and is making good progress, without further commenting on the yield.

TSMC plans to build three plants in Arizona, each with cleanroom spaces twice the size of typical logic fabs in the industry. The first fab is expected to begin mass production in the first half of 2025.

TSMC’s second fab in Arizona will use 2nm process technology to meet strong AI-related demand, with production expected to begin in 2028. The third fab will employ 2nm or even more advanced process.

TSMC stated that once the fabs are fully operational, they will deliver the same level of manufacturing quality and reliability in Arizona as is provided in its Taiwan facilities.

The U.S. government officially announced in April that it will provide a USD 6.6 billion subsidy to TSMC, and confirmed that TSMC will build its third fab in Arizona, USA, with total investment rising to USD 65 billion.

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• [News] TSMC’s Kumamoto Fab Influence Expands, Economic Spillover Effect Expected to Exceed JPY 10 Trillion
• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab

(Photo credit: TSMC)

As per a report from Economic Daily News, TSMC’s first European 12-inch fab is set to hold its groundbreaking ceremony on August 20. Along with TSMC’s ongoing projects in Japan and the U.S., the investment has amounted to nearly USD 100 billion. Meanwhile, this move is also expected to generate opportunities for supporting Taiwanese contractors.

The new TSMC facility in Dresden, Germany, is anticipated to use 28/22nm planar CMOS and 16/12nm FinFET process, with a monthly production capacity of approximately 40k 12-inch wafers.

Per TSMC’s plan, its fab in Germany will start operation by the end of 2027, with estimated costs exceeding EUR 10 billion (approximately USD 10.8 billion), creating opportunities in plant equipment and engineering sectors.

In response to the demand, Marketech International, a Taiwanese fab tool maker, has already set up offices and accommodations in Dresden in 2023 and has deployed staff there.

Additionally, Topco Scientific, a Taiwanese semiconductor materials distributor, is also said to be planning to establish a presence in Europe, with plans to set up operations in Prague, Czech Republic, about two hours’ drive from Dresden.

On the other hand, TSMC is accelerating the construction of its Kumamoto plant in Japan, with production scheduled to begin by the end of this year. This facility will be the fastest among TSMC’s new overseas fabs to start production. TSMC is also actively advancing the construction of a second Kumamoto plant.

TSMC plans to invest over USD 20 billion in its two Japanese facilities, which are expected to have a combined monthly capacity of over 100k 12-inch wafers. The plants will offer 40nm, 22/28nm, 12/16nm, and 6/7nm process.

Once operational, the Kumamoto plant is anticipated to generate significant opportunities in the semiconductor inspection sector.

MA-tek, a giant in semiconductor inspection and analysis services, is planning to expand its service at its laboratories in Nagoya and Kumamoto, while setting up a third laboratory to fully meet the needs of local semiconductor clients.

As for TSMC’s fab in Arizona, U.S., the company has planned a total capital expenditure exceeding USD 65 billion. Industry sources cited by Economic Daily News have expected that companies like United Integrated Services and Marketech International will continue to benefit from this investment.

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• [News] TSMC Reports No Major Damage to Kumamoto Plant after 7.1 Magnitude Earthquake near Kyushu, Japan
• [News] TSMC’s German Plant Reported to Break Ground in Weeks, Expected to Begin Production by Late 2027

(Photo credit: TSMC)

The U.S. government officially announced today that it will provide a USD 6.6 billion subsidy to TSMC, and in its latest press release, confirmed that TSMC will build its third fab in Arizona, USA, with total investment rising to USD 65 billion.

Due to various construction and chip incentive factors, TSMC announced in 2023 that the commissioning of Fab 21 (Fab 1) in Arizona, originally planned for 2024, was postponed to 2025. In January 2024, it was further announced that Fab 2 (originally scheduled to commence operations in 2026) would not begin mass production until 2027 or 2028.

According to the latest information released by TSMC, Arizona’s first fab is on track to begin production leveraging 4nm technology in first half of 2025. The second fab will produce the world’s most advanced 2nm process technology with next-generation nanosheet transistors in addition to the previously announced 3nm technology, with production beginning in 2028.

The third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade. Each of the three fabs, like all of TSMC’s advanced fabs, will have cleanroom area approximately double the size of an industry standard logic fab.

TSMC’s confirmation of plans to build a third fab in Arizona signifies its move towards more advanced semiconductor production in the United States. However, based on the current construction progress in the U.S., market estimates suggest that mass production may not begin until after 2030.

“The CHIPS and Science Act provides TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States,” said TSMC Chairman Dr. Mark Liu.

“Our U.S. operations allow us to better support our U.S. customers, which include several of the world’s leading technology companies. Our U.S. operations will also expand our capability to trailblaze future advancements in semiconductor technology.”

“We are honored to support our customers who have been pioneers in mobile, artificial intelligence and high-performance computing, whether in chip design, hardware systems or software, algorithms, and large language models,” said TSMC CEO Dr. C.C. Wei.

“They are the innovators driving demand for the most advanced silicon that TSMC can provide. As their foundry partner, we will help them unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona. We are thrilled by the progress of our Arizona site to date and are committed to its long-term success.”

This market news emerged shortly after the major earthquake in Hualien, Taiwan, leading to speculation within the industry about its connection to the earthquake. Nevertheless, according to industry sources, the recent news about the Fab 3 project in Arizona was not triggered by the recent earthquake but was actually finalized by TSMC after discussions with the U.S. government on future plans.

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• [News] TSMC’s US Fab Reportedly Eyeing for Early Mass Production

(Photo credit: TSMC)

It’s reported that TSMC’s new fab in Arizona, USA, is rushing to conduct the trial production of its first production line by mid-April and aims to complete all preparations for mass production by the end of this year. According to a report from the Economic Daily News, if everything goes smoothly, there is a chance that the original schedule for mass production in the first half of 2025 at the new US fab could be advanced to the end of 2024.

Regarding these rumors, TSMC stated on April 1st that the progress of the Arizona fab is proceeding according to plan, and for relevant information, please refer to the company’s official announcements.

TSMC is scheduled to hold an earnings call on April 18th, and ahead of the conference, positive news has emerged regarding the new US fab. It is anticipated that the related topics will also be the focus of attention on the day of the conference.

In the previous earnings call, TSMC announced its plan for the new US fab to commence mass production using the 4-nanometer process in the first half of 2025. Per Economic Daily News‘ report, the company believes that once this fab begins operations, it will be able to provide manufacturing quality and reliability on par with its Taiwan fabs in Arizona.

Industry sources cited by the report suggest that TSMC’s new fab in the United States is racing to complete the setup of its first production line by mid-April and commence trial production. Based on estimations of around 6.5 months from trial production to mass production, with an additional month for verification, there’s a chance that all preparations for mass production could be completed by the end of this year.

Taking stock of TSMC’s presence in the United States, the company currently operates an 8-inch fab in Camas, Washington, and has design centers in Austin, Texas, and San Jose, California. The new fab in Arizona will serve as TSMC’s second production base in the United States.

TSMC’s new fab construction in the United States faced labor shortage issues, which previously led to the announcement of a delay in the production schedule until 2025. However, TSMC has been making efforts to improve the problems encountered in the new fab and is seeking the maximum official subsidy support. Earlier report from Bloomberg indicated that TSMC’s new US fab could potentially secure over USD 5 billion in subsidies from the US government, but the relevant proposal has not been finalized.

TSMC announced the expansion of its investment in the new US fab in December 2022. Construction of the second phase of the Arizona fab has begun, with a total investment of approximately USD 40 billion for both phases. The first phase is expected to produce 4-nanometer chips, while the second phase will produce 3-nanometer chips.

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• [News] With Rampant Plant Construction, TSMC Reportedly Expected to Revise Upward Capital Expenditure
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(Photo credit: TSMC)