Slow chip market conditions and a delay in government funding allocations pushed back the estimated completion date for Intel’s vaunted $20 billion project to construct semiconductor manufacturing plants in the US state of Ohio, The Wall Street Journal (WSJ) reported.

Intel unveiled the plan to open a pair of facilities in January 2022 and broke ground at the sites nine months later, with production from the plants originally expected to begin in 2025. However, this expectation is now rumoured to have been shifted to late 2026.

When it announced the project, Intel CEO Pat Gelsinger said its US investments would “help meet the unprecedented demand for chips”. The move was also positioned as aiding the country’s cause in competing with the growing semiconductor industry in China.

However, WSJ reported the project was now being held up by a combination of market challenges and funding issues.

In a statement to WSJ, Intel highlighted significant progress had been made on the project.  

The company previously stated the scope and pace of the project would “depend heavily on funding from the US CHIPS [and Science] act”.

Last week Reuters reported some subsidies under the scheme would likely be awarded ahead of a presidential speech in early March.

The legislation received the nod from US president Joe Biden in August 2022 having been proposed two years earlier.