Germany refuses to give Intel more money for a chip factory of 17 billion euros
Germany’s finance minister says there is no money in the budget for higher subsidies for Intel’s planned semiconductor factory in East Germany, Financial Times reports.
intel’s plan to build a huge €17 billion chip factory in Magdeburg, Germany, is a cornerstone of the EU’s plan to produce 20% of the world’s semiconductors by 2030.
However, the project has faced a number of cost overruns, leaving Intel and Germany deadlocked over who will foot the bill for the plant, which is now expected to cost in the region of €20 billion.
Intel said in March it wants $4-5 billion more in government grants, in addition to the $6.8 billion already handed out.
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But the authorities are unwilling to give the US chip giant more money because there is “no more available in the budget,” said the German finance minister. Christian Lindner told the FT on Sunday.
This is a departure from an earlier statement in April when German officials said they would “consider” a boost. grantsbut only if Intel is willing to spend more on infrastructure.
According to the FT, the discussion about whether Intel should receive more subsidies or not has divided the cabinet.
Representatives from the left-wing Greens and Social Democrats support calls for more subsidies, while Lindner, from the more conservative Free Democrats, said he would oppose an increase in subsidies even if Intel increased the scope of the project .
This political uncertainty casts doubt on hopes of reaching a deal, which could represent another potential blow to the project. The construction of it was fantastic postponed late last year due to economic hurdles, which Intel attributed to high energy prices and inflation following Russia’s war on Ukraine.
While it may seem like a matter of throwing an extra few billion into the project, the chipmaker is facing serious cash flow problems. Late last year, Intel CEO Pat Gelsinger said, said the company would cut as much as $10 billion in annual spending by 2025.
Either way, resolving the funding dispute will be critical to the future of the project. Should it prove successful, it would be Europe’s largest semiconductor factory and help the bloc reduce its dependence on foreign supplies of the chips – essential components in everything from cars to refrigerators.
