2023-06-19 18:18:00
Kamil Kowalcze, Michael Nienaber and Jillian Deutsch
Hoy 15:18
Germany and Intel Corp. closed an agreement for the US company to receive an expanded subsidy package worth regarding €10 billion ($10.9 billion) for a semiconductor plant in the former communist east, according to people familiar with the deal.
Intel confirmed the agreement Monday without providing a specific amount for financial assistance. He said he plans to invest around €30 billion in the “cutting-edge wafer manufacturing center” in Magdeburg, which according to Chancellor Olaf Scholz represents “the largest foreign direct investment in the history of Germany”.
Together with Intel’s facilities in Ireland and Poland, the new site, which will consist of two floors and will be called “Silicon Junction”, create an end-to-end semiconductor manufacturing infrastructure, supporting the European Union’s push for a more resilient supply chain, the company said in a statement.
The first facility is expected to go into production in four to five years following approval by the European Commissionhe added.
“Today’s agreement is an important step for Germany as a high-tech production site and for our recovery,” said Scholz, who attended the agreement signing ceremony at the chancellery in Berlin along with Intel CEO Pat Gelsinger.
The agreement was signed by Scholz’s chief economic adviser, Joerg Kukies, and Keyvan Esfarjani, Intel’s executive vice president, global chief operating officer and general manager of manufacturing, supply chain and operations.
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Intel purchased the land for the project in late 2022 and initially agreed to build the facility with €6.8 billion in government aid, but postponed the start of construction due to financial difficulties.
The benefits of the agreement
The agreed enhanced package will now include both traditional support in the form of financial subsidies as price caps for energy, according to the people cited.
Intel said the site is expected to generate 7,000 jobs during the initial construction phase, as well as some 3,000 permanent jobs andn high technology and tens of thousands of additional positions “throughout the industry ecosystem”.
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Under Gelsinger’s tenure, Intel has embarked on a massive expansion program aimed at regaining its former dominance of the industry and diversifying manufacturing centers for critical components, currently concentrated in East Asia.
Magdeburg was a key part of those plans following outperforming other sites in Europe, but the project foundered following energy prices soared along with construction and material costs.
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