A German official said the country might not provide additional subsidies for Intel to expand its chipmaking capacity in Europe as opinions among the eurozone's largest economy are still divided.
Intel is planning to build a wafer fab in Magdeburg, Germany. DPA reported that Germany had promised EUR6.8 billion (US$7.3 billion)in financial aid, and Intel reportedly demanded EUR10 billion.
In an interview, Christian Linder, Germany's finance minister, told Financial Times that there is no more money available in the budget, and the country is trying to consolidate the budget rather than expand it.
According to Intel's 10-K document filed to the US SEC, Intel is looking to invest in manufacturing capacity globally to accelerate its IDM 2.0 strategy, including EUR80 billion in the European Union over the next decade across the chip value chain, including R&D, manufacturing, and advanced packaging. Intel plans to invest in a wafer fab in Germany, create a new R&D and design hub in France, and R&D, manufacturing, and foundries services in Ireland, Italy, Poland, and Spain.
DPA quoted an Intel spokesperson saying that geopolitical challenges had grown, global demand for semiconductors had fallen, and increased construction costs, energy prices, and inflation are challeing the global economy.
Intel said in its 10-K document that regarding its investment projects in the US and Europe, it expects to benefit from government incentives, and any incentives above expectations would increase the pace and size of the investments, adding that incentives below expectations would increase its anticipated cash requirement. Intel plans to commit US$22.7 billion in capital expenditures for 2023 and US$8.3 billion in the long term.
S&P Global said in a report that while the US has pursued a pro-active policy to re-establish domestic chipmaking capacity, the EU's approach largely envisages the reshuffling of existing EU funding programs into target measures rather than raising new funds to support the development of the semiconductor technologies and processor chips.
Financial Times reported that some in Germany argued against subsidies as it would be a waste of taxpayers' money and could not help Germany reduce its dependence on Asian suppliers due to the complexity of the chip supply chain.
