We have already reported several times on Intel’s planned megafab in Magdeburg. Now further details have emerged about the financing of the large-scale project. In particular, the federal government has commented on planned subsidies. Intel is to receive almost 6.8 billion euros in support for its megafab. This covers 40 percent of the expected total costs.
Politicians show themselves to be generous
Financial support of this magnitude is anything but usual. Certainly, it can be attributed to the fact that the EU, with its European Chips Act, is desperately looking for ways to initiate its own semiconductor and chip manufacturing. Of the 6.8 billion euros, 40 percent is to cover the costs of the first two plants, which are to be built by the end of 2024. However, the extensive subsidy does not really come as a surprise. After all, Intel’s CEO Pat Gelsinger has openly communicated from the beginning that the company would only settle if correspondingly high subsidies flowed.
Of the total of 6.8 billion euros, a not insignificant part comes from Germany itself. The exact amount of the subsidies from the federal government is unknown. However, it is certain that the 2.7 billion euros that politicians want to invest in the development of semiconductor and chip technology this year will go almost entirely to Intel. Next year, the EU would also like to be generous and take over the remaining 4.1 billion euros. After all, Intel’s Magdeburg Megafab is an “Important Project of Common European Interest”.
East Germany’s attractiveness is growing
Intel is the next major U.S. tech company after Tesla to settle in the territory of the new German states. In this way, politics is not only solving the still relatively recent problem of the semiconductor shortage. On top of that, this opportunity can be used to beat the advertising drum for eastern Germany. In particular, Saxony-Anhalt, which is considered a structurally weak region, should experience a real upswing. In addition to expanding the infrastructure, Intel says it will also create 3,000 new jobs. However, this only concerns the Megafab itself. The surrounding area in the form of suppliers, service providers and other subcontractors is expected to bring tens of thousands of new jobs to the region.
So it’s no surprise that politicians are expecting the population of the Magdeburg region to grow by a substantial amount. The population of the state capital, which currently has 236,000 inhabitants, is expected to grow by up to 17 percent in connection with Intel’s factory site. Obviously, local residents can hardly wait for construction to finally begin. After all, huge areas of farmland are already being prepared for the construction of the first two semiconductor plants. Next year, the foundation stone will then be laid for the plant, which plans to produce 40,000 silicon wafers every month after completion in 2027.
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In the future, chips from the Magdeburg megafab should then be considered non plus ultra in the chip technology sector. After all, Intel wants to establish brand-new manufacturing processes on the factory premises. The most exciting of these is probably the plan to manufacture chips in the 1.8 nanometer process. We are curious to see in which direction the project will develop and whether Intel will be able to build its huge factory site as quickly as Tesla did with the Gigafactory in Grünheide, Brandenburg.