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Intel delaying German factory start, wants more subsidies: Volksstimme

CNA – Intel Corp has backed away from its original target of opening a chip factory in the eastern German city of Magdeburg in the first half of 2023, regional newspaper Volksstimme reported, saying the semiconductor giant wanted more public subsidies.

The plant is central to German and European Union (EU) plans to strengthen the continent’s resilience by doing more manufacturing locally after the COVID-19 pandemic and the Russia-Ukraine situation highlighted the risks of long, globe-spanning supply chains.

But the newspaper said surging energy and raw materials prices had upset the United States (US) company’s original calculations. Where Intel had originally budgeted for costs of EUR17 billion (USD18 billion), prices were now closer to EUR20 billion, the paper said.

“Geopolitical challenges have grown and demand for semiconductors has fallen,” Intel spokesperson Benjamin Barteder was quoted by the paper as saying. “This means we cannot yet give a definitive date for the start of construction.”

The company added that it was discussing with the government how a funding “gap” could be bridged, the newspaper said.

“The gap emerged in this current situation. We are working with partners in the government to push the project forward,” the newspaper quoted Intel as saying.

Intel did not immediately respond to a request for comment.

The Intel Corporation logo at a temporary office during the World Economic Forum 2022 in the Alpine resort of Davos, Switzerland. PHOTO: CNA

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