Intel has announced further delays to its $28bn chip manufacturing plants in Ohio, with the first facility now expected to be completed by 2030.

The factory, located in New Albany, will begin operations between 2030 and 2031, extending the timeline by at least five years from the original plans.

The delay comes as Intel cut capital expenses following its attempt to become a contract chip manufacturer for other companies, which has impacted its financial stability.

Intel Foundry Manufacturing general manager Naga Chandrasekaran said the changes aim to align factory operations with market demand and manage capital responsibly.

He added: “We are taking a prudent approach to ensure we complete the project in a financially responsible manner.”

The second factory in Ohio is projected to complete construction in 2031 and begin operations in 2032, the company said.

Construction at the Ohio factory site will continue, though at a slower pace over the next few years.

The company has obtained $2.2bn of the $7.8bn allocated to it as part of the federal CHIPS Incentives Program.

According to the US Department of Commerce, at least $1.5bn of this funding is designated for the New Albany project.

Additionally, an agreement between Intel and the Ohio Department of Development provides the company with $300m in grants to assist with the construction of each factory, provided that they are completed by the end of 2028.

In 2024, Intel laid off 15% of its workforce, suspended dividends, and initiated a cost-saving plan involving significant cuts to capital expenditure.

The latest development comes after the chip giant announced plans to freeze extra $15bn investment in a chip factory being built in Kiryat Gat, Israel.