Chip manufacturer Intel has announced a massive multi-billion-euro project that will involve the construction of state-of-the-art factories in Europe. The €30 billion investment will predominantly be focused on Magdeburg, Germany, where Intel and its partners, including the German government, plan to establish two semiconductor plants, known as ‘fabs’.
This ambitious initiative is part of Intel’s €33 billion investment program for Europe, which was launched in March 2022. Initially, €17 billion was designated for the construction of new fabs in Germany, with the land for the project acquired last November. However, disagreements over subsidies caused a temporary delay. Intel sought around €10 billion in subsidies, citing rising energy and construction costs, while the German government offered €6.8 billion through the EU’s Chips Act.
The deal has now been finalized, resulting in a whopping €30 billion total investment, although the exact breakdown of subsidies has not been disclosed. Intel CEO Pat Gelsinger said, “Building the ‘Silicon Junction’ in Magdeburg is a critical part of our strategy for Intel’s growth,” and pointed out the benefits of the project in terms of job creation and supply chain resilience.
German Chancellor Olaf Scholz praised the agreement as an important step for Germany as a high-tech production location, emphasizing the significance of Intel’s investment in terms of technology, ecosystem development, and chip production.
In addition to the German project, Intel recently announced a $4.6 billion investment in a new assembly and testing facility in Wrocław, Poland. Furthermore, Intel is also investing heavily in a factory in Israel, with plans to establish new factories in the US through a deal with investment firm Brookfield.
The vast sums involved in these deals underscore the central role of semiconductors in today’s economy and the increasing importance of maintaining a reliable supply chain. As a result, governments and businesses all over the world have shown their willingness to fund large-scale investments in semiconductor production facilities.