Intel has announced that it will increase its investment in two new semiconductor plants in eastern Germany from €17bn to €30bn. This decision comes as a result of the company receiving higher government subsidies for the project. Earlier this year, Intel demanded that the government increase its financial support from €6.8bn to at least €10bn due to rising construction and energy costs. After a dispute arose, the two parties have now reached an agreement.
The increased investment in the semiconductor plants, nicknamed “Silicon Junction,” is significant for Germany and the EU. It is the largest foreign investment in Germany’s history and is seen as crucial in the EU’s plans to double its share of the global semiconductor market by 2030.
Intel’s revised letter of intent with the government expands its investment to €30bn and reflects the expanded scope of the project since its initial announcement. While the exact level of subsidy has not been disclosed, the government sources indicate that it now stands at €9.9bn.
The semiconductor company also plans to utilize more advanced technology, known as the “Angstrom era,” in the facilities than originally planned. This technology involves creating transistors smaller than one nanometer.
Additionally, Intel recently revealed its plans to construct a $4.6bn semiconductor assembly and testing plant in Wrocław, Poland, scheduled to be operational by 2027. When combined with the factories in Magdeburg and Ireland, this will establish a first-of-its-kind, leading-edge semiconductor manufacturing value chain in Europe.
Intel CEO Pat Gelsinger described the Magdeburg project as a critical part of the company’s growth strategy, creating a capacity corridor that is unrivaled in terms of wafers to complete packaged products. The first facility is projected to begin production within four to five years, following the approval of the subsidy regime by the European Commission.
The Magdeburg site is expected to generate 7,000 construction jobs during its initial phase, around 3,000 permanent high-tech jobs at Intel, and tens of thousands of additional jobs across the semiconductor industry ecosystem. German officials, including Chancellor Olaf Scholz and Deputy Chancellor Robert Habeck, have praised Intel’s investment, noting its technological advancements and contribution to European sovereignty.
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