Germany: Intel remains committed to German chip plant project despite delay, Scholz says.
German Chancellor Olaf Scholz said on Tuesday that the U.S. chipmaker Intel INTC.O. is committed to its plan to build plants in eastern Germany despite the two-year delay as part of its cost-cutting strategy.
“It is important for us that we take this opportunity in this very volatile business of the semiconductor industry to help ensure that there is nevertheless a further expansion of the already profound capacities in Germany,” Scholz said in Astana.
Intel CEO Pat Gelsinger released a memo to employees on Monday outlining a number of steps the company would take to revive itself, which included pausing construction at its project in the city of Magdeburg for two years.
German Economy Minister Robert Habeck also reiterated Germany’s commitment to boosting semiconductor production in Europe and urged Intel to “quickly get back on a path that enables investment.”
The delay has sparked a disagreement within Germany’s ruling coalition about the suitable use of the funds initially allocated for Intel. On one hand, the finance ministry suggests it should focus on balancing the budget, while the economy ministry prefers to redirect it towards additional investment opportunities. Therefore, the German Chancellor is set to “jointly discuss” the matter with his coalition.
Meanwhile, economists recommend using the funds for broader economic improvements, including tax reform, which could encourage investment across various other sectors.
Intel and Germany signed a deal last year to build a €30 billion chip manufacturing site in the eastern city of Magdeburg, and the German government promised federal aid worth €9.9 for the project.
Semiconductor projects focus on the production and development of semiconductor technology, which is vital for electronic devices like computers and smartphones. These initiatives involve building new manufacturing facilities, upgrading existing ones, and investing in research to advance semiconductor technology. Such projects are essential to meet rising demand and drive technological progress.
