Germany’s finance minister Christian Lindner has ruled out providing any more subsidies to US chip manufacturer Intel for its new chipmaking facility in Magdeburg, Germany. Originally due to receive around EUR 6.8 billion in support, the semiconductor giant was hoping this would be increased to EUR 10 billion owing to higher energy and construction costs. In an interview in early June with the Financial Times, Lindner, who is a member of the Free Democrats (FDP) party, said he opposed the increase in support. “There is no more money available in the budget,” he said. “We are trying to consolidate the budget right now, not expand it.” The issue has split Scholz’s coalition government. Speaking at a conference in Brandenburg a few days after the FT report, economy minister Robert Habeck of the Green Party said that he believes the governmental provision, although expensive, is a “good investment in the future”.
“And if we say no, then we will have to bear the consequences,“ said Habeck. “We will have a dependency on foreign production, we will have a loss of knowledge and, above all, we will not have the depth of the supply chains.
“Therefore, from my side, it’s a clear yes.”
The chipmaker announced in March 2022 it would invest EUR 17 billion building the Magdeburg facility with work to start in early 2023, and production to begin in 2027. In December 2022, the manufacturer rowed back on this timeline, with reports suggesting it was looking to secure further subsidies. According to government sources cited by Handelsblatt, Intel now plans for an outlay of EUR 27 billion for the plant’s construction. Talks between the federal government and Intel‘s executives are scheduled for mid June.