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Intel revises estimate for Magdeburg plant
The US corporation Intel has presented the German government with a new estimate for the construction of a plant for the production of chips. According to the calculations, the investment of the German side should amount to 10 billion euros, and the company – 17 billion euros.
It became known about the construction of the Intel plant in Magdeburg in March 2022. At that time, the plans of the company to create a modern enterprise were enthusiastically received by the local authorities. It was assumed that the plant would provide about 10 thousand jobs for residents of the region. Intel estimated its investment in the project at 17 billion euros. Part of the cost was to be covered by the German government in the form of subsidies to the manufacturer. The commissioning of the plant was planned for the first half of 2023, but in December 2022 Intel changed its plans.
During the work, the construction estimate increased by 6.8 billion euros. The reason was the increase in energy and material prices. In addition, Intel decided to use a different technology for chip production in the new plant, which is more efficient than originally expected. The company cites the decline in global demand for chips as another factor for reviewing the volume of investment. Therefore, the manufacturer is asking the German authorities for more support for the project.
It should be noted that the project with Intel is extremely important for Germany and the European Union as a whole. It will expand the local production of semiconductor products, strengthen the region’s economy and increase the number of jobs.
In addition to building the plant in Germany, Intel also plans to increase production capacity in Vietnam. For this purpose, the company is considering increasing investments. So far, there is no official information about the exact amount of investment. However, some experts suggest that the amount could reach $1.5 billion and will be allocated within a few years.
The expansion of production in Vietnam could be an indication that Intel wants to reduce its dependence on the supply of semiconductor products from Taiwan and China. Political risk in the region remains high. In addition, trade tensions between Washington and Beijing continue to weigh on the global market. Experts note that Intel is also considering increasing investments in its other plants, such as those in Malaysia and Singapore.
It should be noted that Intel’s plant in Vietnam is the company’s largest. It has every chance of getting funds for expansion, especially since the American giant owns the land adjacent to the plant. However, it is possible that the company will change its plans and give preference to other facilities, including those in the US.