Intel is cutting manufacturing projects and delaying its massive Ohio chip plant as part of CEO Lip-Bu Tan’s push to slash inefficiencies.
The semiconductor giant said Thursday it’s scrapping its planned chip factory in Germany and an assembly/testing site in Poland. Both have been on hold since early 2024. Test operations in Costa Rica will be consolidated in Vietnam and Malaysia.
The $28 billion Ohio factory’s launch — originally set for 2025 — is pushed back again after a delay earlier this year. 
Tan, who took over as CEO in March, called out Intel’s overbuilt capacity as a major drag.
Lip-Bu Tan stated on Intel’s Q2 earnings call:
“Unfortunately, the capacity investment we make over the last several years were well ahead of demand and were unwise and excessive.”
“Our factory footprint has become needlessly fragmented. Going forward, we will grow our capacity based solely on the volume commitments and deploy capex lockstep with the tangible milestones, and not before.”
Tan is aggressively trimming the workforce too. Intel’s headcount dropped about 15% and will end 2025 near 75,000 employees. Management layers were cut in half in recent layoffs.
The layoffs hit Intel Foundry particularly hard, where 15-20% of staff are gone.
Intel’s workforce fell from 124,800 at the end of 2023 to 108,900 at the end of 2024, per its SEC annual report.
Tan reiterated Intel’s mission to clean house and boost accountability:
Lip-Bu Tan stated on the Q2 earnings call:
“We have much work to do in building a clean and streamlined organization, which we have started in earnest, and is remain an area of focus for me during Q3.”
“Our goal is to reduce inefficiencies and redundancies and increase accountability at every level of the company.”
