US tech behemoth halts major German factory initiative
Intel has delayed its plans for a $33 billion chip-making facility in Germany due to sluggish sales and increasing losses, according to CEO Pat Gelsinger. Read Full Article at RT.com
TroibNews 
Intel, the US technology behemoth, is pausing the development of two semiconductor factories in Germany due to declining sales and increasing losses, as revealed by CEO Pat Gelsinger on Monday.
Gelsinger indicated that the initiative in Magdeburg, located in the state of Saxony-Anhalt, will experience a postponement of approximately two years.
The company had initially planned to construct two semiconductor plants in Magdeburg with an investment exceeding $33 billion, expected to create around 3,000 jobs under a broader investment strategy within the EU. Furthermore, Intel had secured approximately $11 billion in government subsidies from Germany as reported by the DPA news agency.
However, these plans are currently on hold as Intel aims to trim losses and has embarked on a cost-reduction strategy earlier this year. Additionally, Intel is delaying the launch of another new facility in Poland.
“We must continue acting with urgency to create a more competitive cost structure and deliver the $10 billion in savings target we announced last month,” stated Gelsinger in a communication to the staff.
The planned site in Germany was set to be the largest chip-making facility under the European Union's Chips Act, adopted last year. This suspension by Intel could undermine the EU’s objective of accounting for 20% of the global semiconductor production by 2030.
“Without Intel in Magdeburg, Europe is lacking its flagship project,” said Frank Bosenberg, the managing director of German industry group Silicon Saxony to Bloomberg on Monday. “Neither a European market share of 20% or the desired technological sovereignty through semiconductor production below 10 nanometers seem realistically achievable by 2030,” he continued.
The EU's strategy to boost its share in global chip manufacturing to 20% by the decade's end is supported by more than $44.5 billion in subsidies. This plan, aimed at decreasing dependency on foreign tech, considered Intel’s investment in Germany as a central pillar.
Following this announcement, German Finance Minister Christian Lindner suggested that the subsidies designated for the Intel project should be redirected to address a $13.3 billion federal budget shortfall anticipated for 2025.
Emily Johnson for TROIB News
Gelsinger indicated that the initiative in Magdeburg, located in the state of Saxony-Anhalt, will experience a postponement of approximately two years.
The company had initially planned to construct two semiconductor plants in Magdeburg with an investment exceeding $33 billion, expected to create around 3,000 jobs under a broader investment strategy within the EU. Furthermore, Intel had secured approximately $11 billion in government subsidies from Germany as reported by the DPA news agency.
However, these plans are currently on hold as Intel aims to trim losses and has embarked on a cost-reduction strategy earlier this year. Additionally, Intel is delaying the launch of another new facility in Poland.
“We must continue acting with urgency to create a more competitive cost structure and deliver the $10 billion in savings target we announced last month,” stated Gelsinger in a communication to the staff.
The planned site in Germany was set to be the largest chip-making facility under the European Union's Chips Act, adopted last year. This suspension by Intel could undermine the EU’s objective of accounting for 20% of the global semiconductor production by 2030.
“Without Intel in Magdeburg, Europe is lacking its flagship project,” said Frank Bosenberg, the managing director of German industry group Silicon Saxony to Bloomberg on Monday. “Neither a European market share of 20% or the desired technological sovereignty through semiconductor production below 10 nanometers seem realistically achievable by 2030,” he continued.
The EU's strategy to boost its share in global chip manufacturing to 20% by the decade's end is supported by more than $44.5 billion in subsidies. This plan, aimed at decreasing dependency on foreign tech, considered Intel’s investment in Germany as a central pillar.
Following this announcement, German Finance Minister Christian Lindner suggested that the subsidies designated for the Intel project should be redirected to address a $13.3 billion federal budget shortfall anticipated for 2025.
Emily Johnson for TROIB News
