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Intel Scales Back Global Manufacturing Projects Amid Streamlining Push

Cansin Cengiz

24 Jul 2025 — 2 min read

Intel Scales Back Global Manufacturing Projects Amid Streamlining Push

Intel is making significant adjustments to its manufacturing ambitions as part of a broader effort to streamline operations and reduce inefficiencies under new CEO Lip-Bu Tan. In the company's latest Q2 earnings report, Intel announced the suspension or cancellation of several high-profile manufacturing projects, reflecting a shift towards a more disciplined, demand-driven growth strategy.

Cancelled and Delayed Projects in Europe

Two major European projects have been officially shelved:

Germany: Plans for a large-scale chip factory, initially announced with much fanfare, will not proceed.
Poland: An assembly and testing facility, also previously announced, has been dropped.

Both initiatives had been put on hold since 2024, and Intel now confirms they will not move forward.

Operational Consolidation Worldwide

In addition to the European cancellations, Intel is consolidating its global test operations. The company will focus its efforts in Vietnam and Malaysia, scaling back activities in Costa Rica as part of a broader effort to concentrate resources and enhance operational efficiency.

Further Delays for US Expansion

Intel's ambitious $28 billion Ohio chip factory faces another setback. Initially slated to open in 2025, the facility's completion has already been postponed and is now delayed again, with no clear new launch date.

CEO Lip-Bu Tan’s Strategy for a Leaner Intel

Lip-Bu Tan, who took over as CEO in March 2025, has emphasized the need to eliminate inefficiencies and focus on core strengths. On the Q2 earnings call, Tan stated:

"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 also reiterated his commitment to building a "clean and streamlined organization," with ongoing efforts to reduce redundancies and increase accountability across all levels.

Significant Workforce Reductions

Intel has undergone extensive restructuring, including multiple rounds of layoffs. The company projects it will end the year with approximately 75,000 employees—a reduction of about 15% from previous levels. Notably, Intel has cut management layers by half and recently announced plans to lay off up to 20% of its Intel Foundry unit workforce, which designs and manufactures chips for external clients.

What This Means for Intel’s Future

Intel's recent moves signal a clear pivot from rapid capacity expansion to a more measured, efficiency-driven approach. By focusing on projects with proven demand and consolidating global operations, the company aims to improve financial performance and operational agility in a highly competitive semiconductor market.