Intel has reportedly reached a preliminary deal to make computer chips for Apple products, according to national and local sources. It’s important news for officials who had been relying on company statements to justify their optimism about the long-delayed foundry operation in New Albany.
Now, that optimism is being reinforced by Apple, one of the world’s biggest microchip customers.
Intel has worked out a formal deal to produce microchips for Apple, following “intensive talks for more than a year,” the Wall Street Journal reported earlier this month. The arrangement was supported by the U.S. Commerce Department and development officials as a way to shore up U.S. chip production — considered a priority for both economic and national security reasons.
A high-ranking government official confirmed to The Dispatch that they were told by Intel “that they’ve always believed they would get that customer (Apple) and that this would happen. But until that happens you can’t move forward.”
Shortly after ground was broken and work begun on the now $28 billion New Albany project in September 2022, there was uncertainty about who would be purchasing microchips, or integrated circuits, that power everything from modern cars to home appliances and military arsenals.
The first of two fabrication plants is to be completed in 2030 and become operational by 2031. A second plant is to be completed in 2031 and be operational in 2032, according to a March Intel status report to Ohio officials. Originally, the site was to have begun producing chips in 2025.
With the surge of data centers, advanced chip manufacturing, largely from Asia, consumed the industry and cast further doubt on conventional chips made in foundry operations domestically, including in New Albany. There just weren’t enough customers to support traditional microchip manufacturing.
“Assuming this goes through, they will have a customer that will use up all its existing capacity in Ireland and Arizona as they scale up and then put them in position to be operational in Ohio in 2032, as they promised,” the official told The Dispatch, citing Intel officials.
Intel’s Leixlip, Ireland, and Chandler, Ariz., fabrication plants would need to reach capacity from Apple’s deal, before the New Albany plant would become operational, the official said he was told.
“It’s behind schedule but it’s still on track,” said the official, who spoke on background, citing privacy concerns for both Apple and Intel, since the deal has not yet been formally announced.
New Albany, whose tax base, jobs and infrastructure improvement would all get a boost from Intel’s success, has consistently been optimistic. Intel had promised about 7,000 construction jobs and another 3,000 full-time workers once the Ohio One fabrication campus is operational.
“The City of New Albany remains proud to be home to the Ohio One campus, and we continue to believe this project represents a transformational opportunity for our community, the region, and the nation’s technology and national security future,” said Mayor Sloan Spalding.
And business leaders have also been supportive, despite Intel saying just a year ago, that they would have to slow progress on the foundry buildout if they couldn’t find customers.
“I think it’s great news,” said Steve Stivers, president and CEO of the Ohio Chamber of Commerce. “And it certainly speaks to what I’ve always said (for Intel) …. all that’s missing is customers.”
Stivers has called Intel’s investment in Ohio “a generational opportunity to strengthen our state’s economy, workforce and global competitiveness.”
Ohio Sen. Jon Husted said that when he learned of the news, “I called (Intel) and they provided reasurrance that everything is on track for production in Ohio by 2032.
“The original goals remain on track,” said Husted. “We need to make more U.S. chips. We can’t be reliant on overseas chips. Ohio is still on track to be the beneficiary of that policy.”
Sen. Bernie Moreno in September emailed Lip-Bu Tan, Intel’s CEO, to complain about delays and demand a response including a “tangible and fiscal impact the delays are having on the citizens of Ohio.” Moreno’s office did not respond to repeated requests from The Dispatch asking if Intel ever responded. Moreno did not respond to an interview request.
Husted said he has been in close contact with Intel. He declined to discuss specifics of an Intel-Apple agreement.
“I was there when the promises were made and I’m going to be there to make sure the promises are kept,” Husted said.
An Intel spokesperson said the company wouldn’t comment on speculation about customers. But Ted Geer, director of government affairs for Ohio, emailed the following: “Intel is the only leading-edge semiconductor foundry researching, developing, and manufacturing advanced process technology in the United States, and Ohio One is central to our long-term strategy to strengthen American technology and manufacturing leadership. We are committed to our U.S. manufacturing investments and continue to have the flexibility to adjust project timelines based on customer demand.”
Intel’s stock price has more than quadrupled in the past year, trading on May 27 at about $118 per share.
The U.S. government became Intel’s largest shareholder, with an almost 10% stake in the company after investing $8.9 billion in August, in addition to $2.2 billion in previous federal CHIPS act grants intended to support domestic microchip manufacturing.
Growth and development reporter Dean Narciso can be reached at dnarciso@dispatch.com.
This article originally appeared on The Columbus Dispatch: Intel’s Apple deal could mean vital customers for delayed Ohio plants
Reporting by Dean Narciso, Columbus Dispatch / The Columbus Dispatch
USA TODAY Network via Reuters Connect
