Intel continues to pull back on its manufacturing projects

Intel CEO Pat Gelsinger is advancing a restructuring plan aimed at reducing inefficiencies by scaling back several manufacturing projects. In its Q2 earnings report, Intel announced it will cancel previously planned chip manufacturing facilities in Germany and Poland, including an assembly and testing site in Poland and a chip factory in Germany, both of which had been on hold since early 2024. The company also plans to consolidate test operations in Costa Rica by shifting them to Vietnam and Malaysia. Gelsinger acknowledged that prior capacity investments were excessive and poorly aligned with demand, leading to a fragmented factory footprint. Moving forward, Intel intends to expand capacity only based on confirmed volume commitments and tie capital expenditures to clear milestones. Additionally, Intel will further delay its $28 billion chip factory in Ohio, originally slated to open in 2025. This announcement coincides with Gelsinger’s first full quarter as CEO, during which he emphasized streamlining operations by divesting non-core units and eliminating redundancies. The company has already reduced its