Negotiations were dragging on, and in this fools game, Germany had recently declared that it did not wish to put any money back on the table, even though the cost of the initial agreement had skyrocketed. But in the last few hours, Federal Chancellor Olaf Scholz and Intel CEO Pat Gelsinger signed the contract in Berlin, sealing Intel’s move and a 30 billion euro investment in Germany.
The Magdeburg site is scheduled to produce the first chips in 2027. The 2 parties communicate that a mutual effort has been made, with Intel committing to produce at the site using the Intel 20A, Intel 18A and subsequent manufacturing processes. This effort requires new technology and exposure systems such as high-NA EUV machines. One of these alone cost almost 400 million euros. Ultimately, the aim is to build a factory that does not yet exist in this form in Europe. It will be used both by Intel itself and by Foundry Division customers. On balance, the total cost of the project increases by “only” 6 billion euros, from almost 24 billion euros to over 30 billion euros. The subsidy “increases from 6.8 billion to 9.9 billion euros”, said a government source. Announced for March 2022, construction of the Magdeburg plant was due to start in the first half of the year, but has still not begun, with Intel citing inflation-related cost overruns and calling for an extension.
