Intel wants more subsidies from the German government to build the plant What do you plan to build? in the city of Magdeburg. Specifically, according to Bloomberg, he wants other 5,000 million dollars, in addition to the money that the authorities promised the company a few months ago. The reason why Intel has requested more money is the high inflation that the region has been going through in recent months, which has caused the construction costs of the plant to rise significantly.
The construction of the necessary facilities for the manufacture of semiconductors requires a high economic investment, which increases the more advanced the technologies used. This is not helped by the fact that in recent months, the rise in the price of energy and the cost of construction materials have further raised the costs needed to build a plant of the characteristics that Intel builds.
When initially planning the construction of the Magdeburg one, Intel pointed out that It was going to cost him about 18,700 million dollars, and that he was going to count on 7,200 million dollars in state aid to complete the project. In the future, moreover, these facilities are going to become one of Intel’s main chip manufacturing points, which implies that its total construction costs (with possible expansions in the future), equipment and start-up can reach to 88,000 million dollars.
But the post-construction planning situation has meant that Intel has had to postpone its lift, and now, with rising costs for energy, materials and inflation, lntel believes that it will need to invest some 31,675 million dollars in the project. That’s why he wants the German government to give him more money.
The figure raised, close to 5,000 million, has not yet materialized. What is confirmed is that Intel is negotiating with the German government regarding an increase in the subsidy it will receive. The German Finance Minister has not commented on the ongoing negotiations, but has confirmed that the European Union’s targets of producing 20% of all global chip production in the region by 2030 remain on track.
With this objective in mind, the president has assured that “the federal government is prepared to support the semiconductor industry in Germany with several billion euros, as well as to make it possible for new factories to be set up«. Of course, they have recognized that providing additional financing would require the approval of the European Commission.
Meanwhile, from Intel they have pointed out that «Disruptions in the global economy have resulted in rising costs, from building materials to energy. We appreciate the constructive dialogue with the federal government to address the cost gap with construction in other locations, and to make this project globally competitive.«.
It is not the only project related to semiconductors that Intel has in the territory of the European Union. Among other projects, he has planned to build a research and development center in France. At present, the plans to build it and put it into operation continue as originally planned.
