On June 19, Intel announced a large investment to build two modern semiconductor factories in Germany. According to Reuters , the American chip company will receive 10 billion euros in German funding. The figure shows that the scale of the project has increased compared to the original plan in 2022. At that time, Intel wanted to invest 17 billion euros in the Magdeburg factory.
Intel CEO Pat Gelsinger expressed his gratitude to the German government as well as the state of Saxony-Anhalt, where the company plans to locate a factory, for “fulfilling the vision of a vibrant, sustainable and leading semiconductor industry in Europe.”
Under Mr. Gelsinger's leadership, Intel has invested billions of dollars to build factories on three continents to restore its dominance in the semiconductor industry and better compete with rivals such as AMD, Nvidia and Samsung.
The German deal is Intel’s third major investment in just four days. On June 16, the US tech giant revealed plans to build a $4.6 billion chip factory in Poland. On June 18, Israel said Intel would spend $25 billion on a factory there.
Semiconductor manufacturing is expected to become a trillion-dollar industry by 2030, up from $600 billion in 2021, according to research firm McKinsey. Both the US and Europe are looking to lure major players in the industry with funding programs and favorable regulations. Germany, worried about losing its investment appeal, has spent billions of euros to help reduce its supply chain dependence on South Korea and Taiwan (China).
German Chancellor Olaf Scholz said that “today’s agreement is an important step forward for Germany as a high-tech manufacturing base.” With Intel’s investment, Germany will catch up with the world’s best technology and expand its capabilities in the microchip ecosystem.
Berlin is also in talks with Taiwan’s TSMC and Swedish electric vehicle battery maker Northvolt to produce in Germany. Germany has also convinced Tesla to build its first European megafactory in the country.
Four or five years after the European Commission approves the funding package, Intel’s first Magdeburg factory could be operational. About 7,000 workers will be involved in its construction. In addition, the factory will create 3,000 high-tech jobs and tens of thousands of other positions in the semiconductor industry.
In 2022, Intel announced plans to build a chip complex in Germany and factories in Ireland and France to take advantage of the EU's loosening of funding and subsidy rules. The EU is looking to reduce its dependence on the US and Asia for chip supplies.
(According to Reuters)
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