‘Germany and Intel are approaching an agreement on billions of additional subsidies for chip factories’
According to those involved, the German government and Intel are close to an agreement on a subsidy of 9.9 billion euros for the construction of an advanced chip factory. A subsidy of 6.8 billion euros had previously been promised, but the chip manufacturer felt that this was too little.
The German Handelsblatt writes This is on the authority of those involved within the government and thus contradicts an official statement by Finance Minister Christian Lindner. A few days ago, the minister said that there is no budget to spend almost ten billion euros on the construction of the chip factory. However, Minister of Economic Affairs Robert Habeck is said to have worked hard recently to achieve the subsidy increase in question.
According to the same sources, the final negotiations between Intel and the German government will take place this weekend. CEO Pat Gelsinger would then come to parliament on Monday to sign the binding agreement.
Last year it was announced that Germany would give 6.8 billion euros in government subsidies to Intel for the construction of a chip factory in the German city of Magdeburg. However, Intel later adjusted its subsidy requirements upwards. The manufacturer did this partly because construction prices and energy costs have risen. According to the manufacturer, this has created a ‘cost gap’.
Remarkably, during a Q&A session with European media last year, Pat Gelsinger said that energy prices were ‘not a determining factor’ for the construction of a German chip factory. The CEO said that the availability of energy was important. “Of course we use energy, but that is not the largest cost of a factory,” the CEO said in September. “These are more likely to be the costs of the equipment and the building. Of course we are concerned about the effects of inflation, but the energy price is not the determining factor for us.”
Renders of the Intel campus in Magdeburg. Source: Intel Corporation