Intel has asked Germany for $5 billion in funding to complete construction of its factory near Magdeburg. According to Bloomberg, inflation and rising energy and material prices have pushed up factory costs significantly, necessitating German government intervention.
Initially, Intel predicted that the construction of the factory would have cost about 18.7 billion dollars and that the German government would have provided funding of 7.2 billion dollars. However, due to the current global economy issues, costs have risen unexpectedly, and now the company estimates that the construction will cost $31.675 billion. As a result, the company is now seeking an additional $4.223-5.279 billion in grants to complete the project. Currently, the company is in discussions with the German government to renegotiate the deal, and the German Economy Ministry has confirmed that any additional funding will need to be approved by the European Commission.
The semiconductor industry is a key sector for the German economy, and it is essential that companies operating in this area are supported. Despite concerns raised by Intel's request for more subsidies, the German government has reiterated its intention to support the semiconductor industry in Germany with several billion euros in order to enable the creation of new factories.
We recall that the American giant is also in contact with the Italian government for the purpose of building a chip packaging plant, which should generate a workforce demand of around 1,500 employees and an additional 3,500 jobs between suppliers and partners. . Given what happened in Germany, it is highly probable that Intel will also have to review its plans for the Italian territory.