March 28, 2023

Intel seeks up to $12 billion in subsidies to build mega chip factory in Germany

Intel continues to move towards building multiple chip factories around the globe, and while its plans are following suit in the Americas, the same cannot be said for Europe. The cost of building a facility increased exponentially due to the Ukrainian War, making the numbers higher than expected. To advance in Germany, for example, they will need a subsidy of up to 12 billion dollars.

Initially, the German government had agreed to provide $7 billion to help Intel in its efforts within the country. However, a new order has been placed by the company stating that they need around 4 to 5 billion to continue the project. Everything has been paralyzed since December 2022, which could mean a big headache for both sides.

The chip factory in Magdeburg was projected to spend $17 billion. However, inflation and other factors made this value reach US$30 billion in a very short time. Now the company is running for more money, especially after the very weak year 2022 for the electronics industry in general. As of this writing, Germany has not officially commented on the request – whether it will be approved or not.

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Intel is currently building several factories around the world to expand its reach. In addition to Germany, they also have projects underway in France, Italy, Ireland and the United States – Ohio, to be exact. Fortunately for you, both the European Union and the US government have money available to accelerate the technology. The EU budget is US$43 billion to expand semiconductor production, while the US is offering US$52 billion.

According to documents, the company intends to use the factory in Germany to produce the nodes of the 18A line (1.8nm). In addition to the pause in the German territory, they have also paralyzed the work in Italy. They wanted to build two buildings in the country, however the amount of 33 billion dollars they got there will only be able to build one.


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Source: Bloomberg

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