Germany could get the largest chip factory in Europe. However, Intel makes the location decision dependent on government funding.
Intel wants to build a large chip factory in Europe, possibly in Germany. However, Pat Gelsinger, head of the hardware company, imposes expensive conditions.
The European Union wants to set up its own chip production facility in order to reduce its dependence on Asian manufacturers. With semiconductors currently in short supply, some industries, including the automotive industry, have to cut production. Intel wants to participate in the European semiconductor alliance.
When it comes to the location of the factory, Intel already has a preference: “There is a lot to be said for Germany,” said Gelsinger of the daily business newspaper Handelsblatt.
Building a factory with USD 10 billion
However, Gelsinger imposes conditions. He makes the project dependent on government funding. South Korea or Taiwan would cover around 40 percent of the construction costs. “To be competitive, we need this level,” said the Intel boss. “A new factory costs at least ten billion dollars, and it takes two of them in one location to take advantage of economies of scale.”
For an investment of 20 billion euros, the subsidies would have to amount to eight billion euros. However, Intel is also planning big: “We would build six to eight fabs at our new location over a decade. That would be by far the largest fab project of all time on European soil,” said Gelsinger.
Intel wants to decide on the location this year
The federal government does not have much time to think about it: The company wants to make a decision on the location in the second half of this year. “This is a critical moment in history. We can now reverse the downward trend and reduce our dependence on Asia,” said Gelsinger. “But in five years it will be too late.”
In an interview with the financial news agency DPA-AFX and the German press agency, VW brand boss Ralf Brandstätter emphasized how important it is to reduce the dependency on Asian manufacturers Asia: A procurement task force of the VW group is concerned ” around the clock with nothing else ” than the shortage of chips. This is “a top topic also at board level”. VW recently had to stop production of the Passat in Emden because electronic components were missing.
