Intel cancels $700M Oregon lab project

Dive Brief:

Tech firm Intel has hit cancel on a $700 million lab project in Hillsboro, Oregon, amid a downturn in semiconductor chip demand, Intel spokesperson Addy Burr told Construction Dive in an email.
The Santa Clara, California-based company announced a plan to save about $3 billion for 2023 — and as much as $10 billion by the end of 2025 — through spending cuts and rightsizing, CEO Pat Gelsinger said during the firm’s third quarter earnings call in October.
“As we accelerate our strategy and respond to the current demand environment, we are looking to reduce costs and increase efficiencies through multiple initiatives,” said Burr. “This includes exploring more cost-effective real estate options to continue our data center research and development work in Oregon that is already in progress.”

Dive Insight:

Intel planned to use the 200,000-square-foot lab facility to study innovative technologies for data centers, specifically heating, cooling and water usage, according to a company press release. The firm first released plans to invest more than $700 million for the research and development lab last May.

Intel’s decision to pause construction on its data center research lab follows a series of other hyperscale data center projects scrapped in recent months.

For example, Meta, the parent company of Facebook, Instagram and WhatsApp, announced a construction pause in December for its $800 million data center in Temple, Texas. The tech company also paused its Kuna, Idaho, data center project that month as well, reports Data Center Dynamics.

Nevertheless, construction industry professionals still don’t expect a tech sector slowdown to affect the pace of data center construction overall, said Richard Branch, chief economist at Dodge Construction Network.

That’s because demand for colocation data centers, or facilities that rent space to third parties, remains stronger than ever, said Danny Horton, senior project manager of the data center division at PCL Construction’s Seattle office.

Horton said there remains “still a lot of work available to meet the constant demand we’re experiencing” and expects development to “continue at all levels of data center construction.”