Germany and Intel sign deal for chip factory in Magdeburg
German Chancellor Olaf Scholz and Intel CEO Pat Gelsinger signed an agreement on Monday paving the way for the construction of a pair of semiconductor facilities in the city of Magdeburg in the eastern state of Saxony-Anhalt.
Scholz called Intel’s investment in the facility the largest foreign direct investment in German history.
“Today’s agreement is an important step forward for Germany as a high-tech production location – and for our resilience,” said Scholz. “With this investment, we are technologically catching up with the best in the world and expanding our own capabilities for ecosystem development and microchip production. This is good news for Magdeburg, for Germany and for the whole of Europe.”
The facilities will cost €30 billion, taxpayer funding around a third
Intel predicts the construction will cost around €30 billion (about $33 billion) and will directly create around 3,000 jobs. He expects the facilities to be online by 2027.
The project, first mooted in 2021, has been called into question – particularly amid doubts about how much financial support the German government could offer and what Intel could demand after poor financial numbers in the last quarter.
Last year, Germany provided around €6.6 billion in grants to support the project. Monday’s announcement was the result of months of additional conversations behind the scenes.
The Berlin government did not release a new figure on Monday, but sources told several German media outlets that the new figure represented roughly a third of the project’s value, or just under 10 billion euros.
In its company press release, Intel acknowledged that the deal contained “increased government support that includes incentives, reflecting the expanded scope and changing economic conditions since the site was first announced”. But he didn’t name any numbers.
Source: DW
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