INTC - Intel's Euro30B investment to be single largest FDI in German history

2023-06-20 04:55:36 ET

Intel ( NASDAQ: INTC ) on Monday said that it will invest more than €30B in Germany to build two semiconductor facilities as part of its manufacturing expansion plan in Europe.

Intel and the German government signed a revised letter of intent for U.S. chip giant's planned leading-edge wafer fabrication site in Magdeburg, the capital of Saxony-Anhalt state.

The agreement includes Intel's expanded investment in the site, now expected to be more than €30B for two first-of-a-kind semiconductor facilities (also known as 'fabs') in Europe, with increased government help which includes incentives.

"Building the ‘Silicon Junction’ in Magdeburg is a critical part of our strategy for Intel’s growth. Combined with last week’s announcement of our investment in Wroc?aw, Poland, and the Ireland sites we already operate at scale, this creates a capacity corridor from wafers to complete packaged products that is unrivaled and a major step toward a balanced and resilient supply chain for Europe," said Intel CEO Pat Gelsinger.

According to a report, Intel is expected to receive subsidies worth €10B, which includes financial subsidies, and price caps on energy.

Intel noted that it bought the land for the project in November 2022, and the first facility is expected to start production in four to five years after the European Commission's (EC) approval of the incentive package.

"Intel's semiconductor production in Magdeburg is the single largest foreign direct investment in German history," said German Chancellor Olaf Scholz.

The company added that the site is expected to create 7,000 construction jobs over the first phase of the build, about 3,000 permanent high-tech jobs at Intel and tens of thousands of additional jobs across the industry ecosystem.

The Magdeburg site will serve Intel products and Intel Foundry Services customers.

"Siemens is proud to collaborate with Intel to accelerate the semiconductor ecosystem in Europe," said Siemens' ( OTCPK:SIEGY ) ( OTCPK:SMAWF ) President and CEO Roland Busch.

The site will be build according to green building principles and will operate with environmental standards to minimize its carbon footprint, according to Intel.

Last week, Intel announced its plans to invest up to $4.6B to set up a semiconductor assembly and test facility near Wroc?aw, Poland, to help the EU work toward its goal of a more resilient semiconductor supply chain.

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