Intel to Invest Over $33 Billion in Chip-Making Plants in Germany

2023

Intel, the U.S. chipmaker, is set to invest more than 30 billion euros ($33 billion) to build two chip-making plants in Magdeburg, Germany. This move, hailed by Chancellor Olaf Scholz as Germany's largest foreign investment to date, comes as part of Intel's expansion strategy in Europe.

The German government has agreed to provide subsidies worth nearly 10 billion euros to support the development of the leading-edge facilities in the eastern city. This amount surpasses the initial 6.8 billion euros that were offered to Intel.

Pat Gelsinger, the CEO of Intel, expressed gratitude to the German government and the state of Saxony-Anhalt, where Magdeburg is located, for fulfilling the vision of a vibrant and sustainable semiconductor industry in Germany and the EU.

Intel has been making significant investments across three continents under Gelsinger's leadership to regain its dominance in chipmaking and compete effectively with rivals like AMD, Nvidia, and Samsung.

The deal with Germany is the latest in a series of major investments by Intel. It recently announced plans for a $4.6 billion chip plant in Poland and a $25 billion factory in Israel.

Globally, semiconductor manufacturing is expected to become a trillion-dollar industry by 2030, expanding from $600 billion in 2021, according to McKinsey.

Germany, like many other countries, is eager to attract big industrial players through state subsidies and favorable legislation. The German government is investing billions of euros to lure tech companies and address concerns about supply chain fragility and chip dependency on South Korea and Taiwan.

The investment in Magdeburg is expected to create around 7,000 construction jobs and approximately 3,000 high-tech jobs at Intel, along with tens of thousands of jobs across various industries.

Intel's expansion in Germany signifies the country's appeal as a high-tech business location and its commitment to securing sustainable and qualified jobs and value creation.

The first facility in Magdeburg is expected to begin operations 4-5 years after receiving approval from the European Commission for the subsidy package.

This move by Intel aligns with the EU's efforts to reduce its reliance on U.S. and Asian chip supplies and strengthen its semiconductor industry.