Intel wants another €5BN in subsidies to build chip plant in Germany

Under the Chips Act, the EU is seeking to end its dependence on China and produce 20% of the world’s semiconductors by 2030. Amidst the political push, attracting global giants to invest in the union’s domestic production has been a key strategy — with Intel’s plan to construct a massive chip plant in Magdeburg, Germany, considered a big boost for the bloc.

But now, Intel is asking the German government for an additional €4 billion to 5 billion in subsidies to move forward with the project, Bloomberg reports, citing people familiar with the matter.

In March 2022, Intel announced an initial investment plan of over €33 billion (reaching €80 billion within the next decade) to strengthen the EU’s semiconductor industry across the entire value chain. This included the megasite in Germany, a new chip research centre in France, a back-end manufacturing facility in Italy, and the expansion of its existing chip factory in Ireland, lab in Poland, and supercomputing centre in Spain.

Construction of the much-anticipated semiconductor factory in Magdeburg was postponed at the end of last year due to economic hurdles, as a result of the high energy prices and inflation following Russia’s war on Ukraine, according to the report.