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Released June 26, 2023 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Chip major Intel Corporation (NASDAQ:INTC) (Santa Clara, California) has confirmed a landmark investment of 30 billion euro (US$33 billion) in its European chip manufacturing operations following a deal with Germany.
Following months of talks, Intel has signed a letter of intent with German chancellor Olaf Scholz for a new factory complex in Magdeburg, 150 kilometers southwest of Berlin, which will be backed with almost 10 billion euro (US$11 billion) in state subsidies. The investment is almost double the 17 billion euro (US$18.6 billion) agreed to last November and represents the largest investment in Germany by an outside company.
Intel said that construction will create 7,000 jobs, followed by 3,000 permanent production jobs and "tens of thousands of secondary ones" in the supply chain connected to the new complex. Both plants will be up and running within "four to five years", once final sign-off is received from the European Commission (EC), Intel stated. The Magdeburg site will serve Intel products and Intel Foundry Services customers.
"Today's agreement is an important step for Germany as a high-tech production location--and for our resilience," Chancellor Olaf Scholz said. "Intel's semiconductor production in Magdeburg is the single largest foreign direct investment in German history."
"Building the 'Silicon Junction' in Magdeburg is a critical part of our strategy for Intel's growth," added Intel chief executive officer, Pat Gelsinger. "Combined with last week's announcement of our investment in Wrocław, 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."
The deal is another major win for Europe in its drive to build a stronger and less reliant chip manufacturing base. Today, the region accounts for less than 10% of global production and its reliance on outside suppliers was keenly felt during the COVID-19 pandemic, when many industrial sectors suffered from crippling shortages.
According to the EU, the goal is to have 20% of the world's microchips production in Europe by 2030. Last year, Europe enacted its European Chip Act to bolster investment and speed up the planning process for new chip plants. For additional information, see February 21, 2022, article - Europe Enacts 'Chips Act' to Battle Semiconductor Shortages.
In addition to the German investment, Intel has confirmed plans to invest 4.6 billion euro (US$5 billion) in a "cutting-edge semiconductor assembly and test facility" in Wroclaw, Poland. The company said the plant will help it meet critical demand for assembly and test capacity that it predicts will be needed by 2027. The Wroclaw assembly and test facilities will receive completed wafers from Intel's fabrication plants (like those planned for Magdeburg), cut them into individual chips, assemble them into final products and test them for performance and quality.
In addition to completed wafers, the facility will be able to accept individual chips and assemble them into final products. It will employ 2,000 people. Intel has been operating in Poland for 30 years and Gdańsk is home to the company's largest R&D facility in Europe, with nearly 4,000 workers.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Following months of talks, Intel has signed a letter of intent with German chancellor Olaf Scholz for a new factory complex in Magdeburg, 150 kilometers southwest of Berlin, which will be backed with almost 10 billion euro (US$11 billion) in state subsidies. The investment is almost double the 17 billion euro (US$18.6 billion) agreed to last November and represents the largest investment in Germany by an outside company.
Intel said that construction will create 7,000 jobs, followed by 3,000 permanent production jobs and "tens of thousands of secondary ones" in the supply chain connected to the new complex. Both plants will be up and running within "four to five years", once final sign-off is received from the European Commission (EC), Intel stated. The Magdeburg site will serve Intel products and Intel Foundry Services customers.
"Today's agreement is an important step for Germany as a high-tech production location--and for our resilience," Chancellor Olaf Scholz said. "Intel's semiconductor production in Magdeburg is the single largest foreign direct investment in German history."
"Building the 'Silicon Junction' in Magdeburg is a critical part of our strategy for Intel's growth," added Intel chief executive officer, Pat Gelsinger. "Combined with last week's announcement of our investment in Wrocław, 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."
The deal is another major win for Europe in its drive to build a stronger and less reliant chip manufacturing base. Today, the region accounts for less than 10% of global production and its reliance on outside suppliers was keenly felt during the COVID-19 pandemic, when many industrial sectors suffered from crippling shortages.
According to the EU, the goal is to have 20% of the world's microchips production in Europe by 2030. Last year, Europe enacted its European Chip Act to bolster investment and speed up the planning process for new chip plants. For additional information, see February 21, 2022, article - Europe Enacts 'Chips Act' to Battle Semiconductor Shortages.
In addition to the German investment, Intel has confirmed plans to invest 4.6 billion euro (US$5 billion) in a "cutting-edge semiconductor assembly and test facility" in Wroclaw, Poland. The company said the plant will help it meet critical demand for assembly and test capacity that it predicts will be needed by 2027. The Wroclaw assembly and test facilities will receive completed wafers from Intel's fabrication plants (like those planned for Magdeburg), cut them into individual chips, assemble them into final products and test them for performance and quality.
In addition to completed wafers, the facility will be able to accept individual chips and assemble them into final products. It will employ 2,000 people. Intel has been operating in Poland for 30 years and Gdańsk is home to the company's largest R&D facility in Europe, with nearly 4,000 workers.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
