Report: Intel’s Magdeburg fab on the chopping board

Intel is considering pausing or halting construction of the chip plant in Magdeburg, Germany, according to a Reuters report. The move would be part of a new set of cost-cutting measures that could also include the divestment of FPGA unit Altera. A company split and subsequent sale of the manufacturing division isn’t part of the plans, which CEO Pat Gelsinger is said to present to the board of management by mid-September.

Having lost technology leadership and lacking the scale to keep up with the massive investments required to stay alive at the leading edge, Intel is in dire straits these days. It’s seemingly inevitable that Gelsinger has to scale back his ambitious plan, launched in 2021, to catch up in technology and capacity. Recently, the firm already announced a 10-billion-dollar cost-saving operation that includes laying off 15 percent of the workforce.

Construction of the Magdeburg fab was to start in the first half of 2023 but has been pushed out several times. The latest delay was reported last May.