Intel shareholder lawsuit: How Ohio plant's parent division is at the center
View a previous report about the delayed timeline of Intel's Ohio One plant in the video player above.
NEW ALBANY, Ohio (WCMH) -- Intel is facing a lawsuit from shareholders for misrepresenting the success of its in-house chip manufacturing projects, which include the Ohio One plant being built in New Albany.
The Construction Laborers Pension Trust of Greater St. Louis sued Intel Corporation, CEO Pat Gelsinger and CFO David Zinser in a northern California court on Wednesday. The group accused the defendants of deceiving investors from Jan. 25 through Aug. 1 using "false and misleading misrepresentations and omissions" about its Intel Foundry services.
Plummeting stock prices rattled Intel's shareholders at the beginning of August after Intel reported a $1.6 billion loss in its quarterly earnings report. The company piled on with an announcement it would be cutting 15% of its workforce. From a high of just under $50 per share in January 2024, Intel's stock crashed to around $19 as of Friday. CNBC reported this was Intel's largest plunge in 50 years, and its lowest stock price in a decade.
"Finally, on Aug.1, 2024, Intel revealed that the problems surrounding its foundry business were far more severe than disclosed," the lawsuit said.
The plaintiffs labeled Intel's standalone chip making division -- launched by Gelsinger in 2021 -- as "floundering," costing investors much more than they originally believed. A datasheet advertised the new Ohio plant as a $20 billion investment for the Intel Foundry, alongside $3.5 billion to build in New Mexico. Intel also acknowledged a $50 billion investment in the existing fabrication plant in Arizona and $3 billion at another in Oregon. The company received major funding from the CHIPS Act as a push to strengthen U.S. chip manufacturing.
Ground broke on Intel's New Albany plant in September 2022. While the company originally expected to complete construction by 2025, it confirmed the central Ohio facility is running behind. Construction is now set to finish between 2026 and 2027 before the plant becomes operational between 2027 and 2028.
Renderings of Intel’s Ohio One plant were released in early May, showing what the semiconductor facility is expected to look like upon completion.