Intel Corp remains “committed” to plans to build a chip factory in the German city of Magdeburg after construction work on the project was delayed indefinitely as a result of company concerns about rising costs, dpa (Deutsche Presse-Agentur) has reported after speaking to a company spokesperson. This follows mounting speculation that the manufacturer would pull out of the project altogether.
The US semiconductor giant announced in March 2022 it would invest EUR 17 billion building the facility with work to start in early 2023, and production to begin in 2027. In December, it rowed back on this timeline, with reports suggesting the manufacturer was looking to secure further public subsidies.
“Geopolitical challenges have grown and demand for semiconductors has fallen,” Intel spokesperson Benjamin Barteder said in an interview in December with the Magdeburg newspaper Volksstimme. “This means we cannot yet give a definitive date for the start of construction.
“The gap emerged in this current situation. We are working with partners in the government to push the project forward.”
Intel was due to receive EUR 6.8 billion in subsidies from the German government (as part of the EU Chips Act). This would have covered close to 40 percent of the original EUR 17 billion construction budget. Rising energy and raw material prices mean the mega-fab will now cost around EUR 20 billion.
The German Federal Ministry of Economics has thus far rejected calls to provide further subsidies to the company, Volksstimme reported in early January.