Intel backtracking on Magdeburg fab

Intel’s plans to start construction of a fab complex in Magdeburg next year have been put on hold, a company spokesperson told German newspaper Volksstimme (link in German). Intel is said to seek more government support due to inflation, geopolitical challenges and lowered demand.

Construction of the fab, announced in March, was scheduled to start in H2 2023. It was supposed to come online in 2027. It required an initial investment of 17 billion euros, of which the German government would cover 6.8 billion euros (40 percent). Now, Intel says costs have risen to 20 billion euros. As a result, the company wants more subsidies from Germany. Discussions about bridging the funding gap are ongoing, according to the report.

Operational costs are likely a sore point, too, now that energy prices have skyrocketed in Europe. The fab’s power use has been estimated to be 2-3 times that of Madgeburg, which has a population of about 230,000. Officials across the continent have been worrying for quite some time about high energy prices weakening Europe’s industrial base.