US chip manufacturer
The federal government wants to support Intel factories with almost 10 billion euros
The federal government wants to support an Intel settlement with almost 10 billion euros. photo
© Andrei Sokolow/dpa
Germany wants to become less dependent on global supply chains. Important step: The planned settlement of chip factories in Saxony-Anhalt. It is one of the largest foreign investments in the country.
According to dpa information, the federal government wants to support the settlement of the US chip manufacturer Intel in Magdeburg with 9.9 billion euros. According to this, Intel is investing more than 30 billion euros, including state aid. However, the increase in state aid still has to be approved by the EU Commission. The “Handelsblatt” had previously reported on the agreement.
In March 2022, Intel announced that chips would be produced in Magdeburg, the state capital of Saxony-Anhalt, from 2027. In a first expansion stage, two semiconductor factories are to be built, which could create several thousand jobs. A high-tech park for the settlement of suppliers is also planned.
Rising construction and energy costs
Originally, Intel had given its investment sum for Magdeburg as at least 17 billion euros. However, due to rising construction and energy costs, it is becoming more expensive. The company has also pledged to use an even more advanced chip technology used in the latest smartphones and computers.
All in all, Intel is almost doubling its investments, according to government circles. Federal funding will increase from the initially planned 6.8 to 9.9 billion euros. As a result, the relative share of funding from the federal government decreases: Originally, the government would have contributed 40 percent of the investment volume, now it should be around 33 percent.
Representatives of the federal government and Intel wanted to sign an agreement in Berlin on Monday. Before that, Chancellor Olaf Scholz (SPD) wanted to meet Intel boss Pat Gelsinger. The federal government and the chip manufacturer had been negotiating intensively on the amount of government support until the very end. Meanwhile, preparatory work for construction is already underway on the site in Magdeburg.
Settlement of strategic importance
The location of the factories is of strategic importance for Germany. Scholz said at Industry Day that the country had become unilaterally dependent on semiconductors in the past. With the European Chips Act and the EU Commission’s goal of bringing a fifth of global semiconductor production to Europe by 2030, Germany’s and the EU’s dependency will be reduced. “Through such investments, we diversify our supply chains and enable German and European companies to source the chips they need in the EU.” In addition, good and sustainable jobs would be created.
Scholz emphasized that every third chip produced in Europe currently comes from Saxony. Companies like Infineon or Wolfspeed have invested in Germany. “More are in the starting blocks,” he indicated. Germany could become one of the largest semiconductor production locations worldwide.
In the case of Intel, Economics Minister Robert Habeck (Greens) in particular had recently advocated higher subsidies to enable settlement. Finance Minister Christian Lindner (FDP) emphasized several times that there was no more money in the federal budget. According to reports, the additional funds should not come from the regular budget, but from a special pot. According to initial information, this is the climate and transformation fund, from which the federal government pays for projects for more climate protection and the transformation of the economy.