Big Western Chip Factories Are Slipping Behind Schedule

• Western megafabs under the EU Chips Act and US CHIPS Act are facing delays, pauses, and slower-than-expected ramp-ups.

• The STMicroelectronics–GlobalFoundries Crolles fab in France has been shelved, highlighting challenges in converting subsidies into operational capacity.

• U.S. projects, including Intel’s Ohio fabs and Micron’s New York campus, are also slipping several years past original timelines.

• Key factors behind delays include slowing demand, rigid funding rules, bureaucracy, permitting challenges, and rising costs.

Governments in the European Union and the United States have poured billions into subsidies to bring more chip manufacturing back home. The EU Chips Act and the US CHIPS and Science Act are designed to make both nations less dependent on Asia for advanced semiconductors.

But the reality on the ground is more complicated with several high-profile “megafab” projects are are now delayed or even paused. In Europe, the STMicroelectronics–GlobalFoundries Crolles fab in France has been shelved for now. Across the Atlantic, U.S. projects in Ohio and New York are also slipping behind original timelines.

New Western chip capacity is coming slower than headlines promised, and that affects sourcing risk, pricing, and long-term design planning.

Understanding the Plan Behind These Initiatives

The EU wants to double its share of global chip production to 20% by 2030 and has bundled roughly €86 billion in public and private funding through various EU and national programs. Only about €4.5 billion is directly controlled at the EU level.

To get the biggest subsidies, projects must often be “first-of-a-kind” in Europe, meaning they bring brand-new capabilities rather than simply adding more of the same production.

A recent report from the European Court of Auditors highlights that while Europe has made some progress, it is “very unlikely” to meet its 2030 chip-production target. Funding is fragmented, slow, and small compared with global competitors.

On the other hand, the US CHIPS and Science Act provides tens of billions in grants and tax credits to support domestic chip fabs. Big recipients include Intel, Micron, TSMC, Samsung, and others, with projects in Ohio, New York, Arizona, and Texas.

Despite this support, U.S. projects face delays due to funding approvals, environmental reviews, construction bottlenecks, and fluctuating market demand.

STMicroelectronics–GlobalFoundries Crolles Megafab

In July 2022, STMicroelectronics and GlobalFoundries announced a joint 300 mm fab next to ST’s existing site in Crolles, France. The planned investment was around €7.5 billion, targeting automotive, industrial, and IoT markets. At full capacity, the fab could produce up to 620,000 wafers per year, supported by French state aid under the EU Chips Act framework.

But after about 18 months of slow progress, the two companies have suspended or shelved the plan, leaving the project’s future uncertain showing that even with approved subsidies, funding does not automatically translate into operational factories.

The Crolles example is not isolated. U.S. megafabs are also experiencing delays:

• Intel’s Ohio fabs were planned for production around 2025. Updates now push completion to 2030–2031 for the first fab and 2032 for the second. Intel says construction is slowing to match market demand and funding flow.
• Micron’s $100B New York campus has seen multiple groundbreaking delays, with full build-out now extending into the 2030s.

Why These Delays Are Happening

Several factors are contributing to the delays and pauses in new megafabs. After the pandemic boom, demand for PCs, smartphones, and certain industrial products slowed, leaving excess inventory and reducing the urgency to ramp new factories quickly. In Europe, funding is spread across multiple programs, and strict “first-of-a-kind” requirements concentrate risk in a few flagship projects, making it difficult to redirect resources when challenges arise.

Large fabs also face complex environmental reviews, local permitting, and massive construction efforts, as seen in projects in New York and Ohio, which can significantly stretch timelines. On top of that, rising costs for materials, energy, and skilled labor are forcing companies to reprioritize their projects Micron, for instance, is accelerating expansion in Idaho while extending the timeline for its New York campus.

What IBS Recommends

We see Western megafabs moving slower than planned. Here’s how to stay ahead:

• Be realistic on timelines: Announced capacities often slip 3–5+ years and factor delays into launches and platform planning.
• Diversify sourcing: Qualify multiple fabs across regions and work with partners who can provide alternate sources.
• Plan for pricing and lead-time swings: Slow Western ramps may cause temporary tightness; maintain flexible agreements and clear forecasts.
• Think long-term: Build scenarios for both a slow Western ramp and continued reliance on Asia to keep your designs and supply chains resilient.