Ohio officials are trying to obtain federal funding for Intel’s multibillion-dollar manufacturing facility, but tensions are mounting as the months pass and a fresh administration approaches.
Tech giant Intel began operations in the Buckeye State more than two years ago, pledging $20 billion for a semiconductor plant that would create tens of thousands of jobs.
Semiconductors are the chips behind e-commerce, social media, cars, computers and everything that uses digital technology, which is almost everything these days.
This would not have been possible without the CHIPS Act, which President Joe Biden signed into law in August 2022. The immediate economic impact was expected to be enormous. The factory will create 3,000 well-paid jobs, 7,000 in construction and tens of thousands of additional jobs.
But that hasn’t happened yet.
In February, Intel told OCJ/WEWS that their goal of starting chip production by the end of 2025 was no longer possible.
It was a historic moment for Ohio, but is it just history now?
“This is a problem that has been going on for a long time,” said Gov. Mike DeWine.
DeWine and the state have already provided billions in funding for the project, but Intel said the federal government is not holding up its end of the bargain. An agreement was reached in the spring under which Intel will receive $8.5 billion in direct financing and $11 billion in loans, the company said.
“I contacted the White House today and asked that they expedite the money to Intel,” DeWine told reporters ahead of the general election.
Despite the delays, Intel still plans to remain in Ohio, a company spokesman said.
“We are proud to be building the Silicon Heartland and are well on our way to establishing Ohio One as one of the world’s leading semiconductor manufacturing centers,” the spokesman said. “We are committed to Ohio and we intend to get the job done.”
But state Sen. Bill DeMora, R-Columbia, who has advocated for the central Ohio area as the Intel project moves forward, said the blame doesn’t fall solely on the administration.
“Intel has to do what it has to do, and then I think the federal government will be willing to give it the money it promised,” DeMora said.
The U.S. Department of Commerce requires companies to comply with regulations to receive money. We asked both the government and Intel where they were stuck. Intel was unable to comment on “private conversations.”
It’s possible that Intel has fully complied and the negotiation process takes a long time, but DeMora believes he would have had no problem getting the money if he had just agreed.
“There is probably some stubbornness on both sides,” the senator said. “We can solve this because we have to get Intel up and running and make them work.”
However, the project faces even greater challenges than just the leisurely flow of funds.
Before the election, U.S. House Speaker Mike Johnson (R-LA) said Republicans would “probably” try to repeal the CHIPS Act.
“I expect we will probably do it, but we haven’t worked out that part of the program yet,” Johnson told a reporter who asked whether he would try to repeal the legislation.
The speaker noted that this was critical for national security, but he went too far.
“President Trump and everyone in Congress will have 100% agreement. We objected to the fact that there was too much stuffed into it,” Johnson said.
After a quick response from Democrats and concerns from Republicans, Johnson withdrew his comment, saying he misheard the question.
However, the future of the Silicon Heart has already been thrown into doubt.
U.S. Senator-elect Bernie Moreno strongly supports Intel’s bill and has said a repeal will not happen, but on Wednesday he said the legislation still needs some work.
“I have seen it modified from subsidies to maybe tax incentives and just better operational implementation of it,” Moreno told reporters.
But the next day, the same group of Statehouse reporters asked Moreno what changes he wanted to make to the CHIPS Act.
“I’ll admit I haven’t read it,” Moreno said. “And one of the things you will find with me is that I will never comment on a bill that I have not read.”
He continued that at a “high level” it was too intrusive to the company’s operations.
“It tells them too much about how to run a business,” he said. “I would rather it be more of a tax incentive program than a subsidy program because the government can’t help itself.”
Ultimately, the senator-elect said Intel will “thrive” in Ohio.
Moreno sent text messages to Intel CEO Pat Gelsinger, and they will work together to make sure the project is a success. Intel confirmed this.
“The idea behind the CHIPS and Science Act originated in the first Trump administration and has strong bipartisan support,” an Intel spokesman said. “Restoring America’s leadership in semiconductor manufacturing is integral to the nation’s economic competitiveness and national security. As the only U.S. company that designs and manufactures cutting-edge chips, Intel has an extremely important role to play, and we look forward to working with the Trump administration on this shared priority.”
That, combined with the company’s financial problems, worries DeMora and other Ohio officials.
Intel shares have fallen more than 50% in the past year while the industry has surged more than 120%. After 25 years in the Dow Jones Industrial Average, Intel was replaced on Friday by Nvidia, a leader in artificial intelligence. The company also experienced mass layoffs in October, with 15,000 employees being laid off and the number of employees decreasing by 15%.
“I think there’s a distinct possibility that Intel will pull back and say, ‘We’re done,’ especially if its stock continues to decline,” DeMora said.
Some Ohio officials privately worry that Intel will become another “Foxconn” scandal. In 2023, based in Ohio Lordstown Engines declared bankruptcy and sued the international manufacturer Foxconn for failing to honor and implement a huge investment contract.
Still, DeWine is confident the project will be a success.
“It’s important for Ohio, I think it’s important for the future of this country,” the governor said. “It’s time to do it.”
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This article was originally published on News5Cleveland.com and are published in the Ohio Capital Journal under a content sharing agreement. Unlike other OCJ articles, it is not available for free republication on other news outlets because it is owned by WEWS in Cleveland.
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