After months of negotiations, the contract for the construction of Intel’s new chip factory in Magdeburg is dry. According to information from dpa and Handelsblatt support the settlement of the US chip manufacturer Intel in Saxony-Anhalt with 9.9 billion euros. Accordingly, the increase still has to be approved by the EU Commission.
The level of subsidies for this project had been disputed until the very end. Intel had referred to increased costs. According to a report by the Bloomberg agency, the funding amount was increased to almost ten billion euros, as discussed recently, although Federal Finance Minister Christian Lindner had resisted it. The federal government had originally promised 6.8 billion euros.
The government has not yet confirmed the subsidy volume. It also remained unclear whether Intel would also spend more money. People familiar with the negotiations had brought this up beforehand, with reference to EU subsidy law issues. A total of 17 billion euros was originally budgeted for the project. Bloomberg reported, citing those familiar with the plans, that Intel will now invest 30 billion euros.
Expert considers subsidy “questionable”
The US chip company is on an expansion course worldwide: In the past few days Intel plans to build a $25 billion plant in Israel announced. “This is the largest investment ever made by an international company in Israel,” said Benjamin Netanyahu, the country’s prime minister. Intel also wants to invest around 4.6 billion dollars in Poland: A plant for testing and assembling processors is to be built in Wrocław (Breslau).
Ifo President Clemens Fuest considers the multi-billion dollar subsidies for setting up a factory for the US chip manufacturer Intel in Magdeburg to be “questionable”https://www.sueddeutsche.de/wirtschaft/.” There are delivery risks with many products, that’s normal Business life,” the head of the Munich institute told the Reuters news agency on Monday in view of the EU’s semiconductor offensive, which aims to reduce dependency on supplies from Asia and the USA. “Securing against this is primarily the task of companies, not the state.”
The funding amount of almost ten billion euros in the room is a very high insurance premium. There are also alternatives to domestic production such as diversification of suppliers, warehousing and recycling. “In addition, it is not clear what exactly is actually produced in Magdeburg, whether it is the chips that Germany or Europe need, and to whom these chips will be delivered in the event of a crisis,” criticized Fuest. In addition, the chip factories, which are considered to be extremely energy-intensive, are to be additionally subsidized by the planned industrial electricity price.
“In addition, the resettlement of such energy-intensive companies does not fit in with other measures such as the capping of energy consumption by the Energy Efficiency Act,” said the economist. “One should at least insist that a considerable amount of research and development be located in Magdeburg.” Because of the positive effect on other companies and actors, for example through the transfer of knowledge, subsidies can then be more easily justified.