Intel's German chip plants to receive €10 billion in government funding as it successfully seeks additional subsidies

-Germany has now indicated its willingness to provide approximately €10 billion in financial support, but only if Intel significantly increases its total investment in its German chip plants. The German government's assistance will be provided through a variety of mechanisms, including price caps. Negotiations on the subsidy could continue through the weekend, with an official announcement likely as early as June 19.
Intel's German chip factory successfully seeks additional subsidies that will receive about 10 billion euros in German government funding.
Last year, US chipmaker Intel announced that it was going to build a chip manufacturing site in Magdeburg, Germany. Intel's chip factory in Germany could receive €6.8 billion in German government subsidies, but due to increased energy and construction costs, it now needs about €10 billion (US$10.9 billion). Intel had asked the German government to provide 17 billion euros in subsidies for its German chip factory, but German Finance Minister Christian Lindner (Christian Lindner) rejected the request, saying "there is no budget", "we are now trying to consolidate the budget, not Expanding the budget."
The German government is divided over Intel's subsidy request, with Chancellor Olaf Scholz and German Economy Minister Robert Habeck willing to provide more financial support. According to Bloomberg reported on June 16, a person familiar with the matter revealed that Germany has now expressed its willingness to provide about 10 billion euros of financial support, but only if Intel must significantly increase the overall investment in this chip factory. The German government's assistance will be provided through a variety of mechanisms, including price caps. Negotiations on the subsidy could continue through the weekend, with an official announcement likely as early as June 19.
German Chancellor Olaf Scholz has said that it is good news that many semiconductor companies are making major investment decisions in Germany and that "if all these plans become a reality, a lot will be brought together here. We are discussing some of them in detail."
Intel's project is the largest foreign investment in post-war German history, according to the Financial Times. The EU plans to increase its global semiconductor market share from the current less than 10 percent to 20 percent by 2030, and Intel's project in Germany is seen as key to that plan. Also according to Bloomberg, Intel initially estimated the German project would cost 17 billion euros, but now expects it to cost 30 billion euros. As with most projects that will receive government funding through the EU chip bill, Intel expects about 40 per cent of its projects to receive subsidies.