Intel’s factory in Europe would be further and further away if the country led by Olaf Scholz did not change its intentions.
What’s going to happen?
The Financial Times revealed in its latest report the challenges Intel is facing on our continent. Negotiations were not easy and, although Germany gave in on some occasions to Intel’s demands, it seems that they have reached their limit and that the agreement to locate the factory in Europe is in danger. Is it possible for Germany to adapt and host one of the largest chip factories after taking this position, or is the negotiation already broken down?
Germany is tired and so are its resources, so it’s up to Intel whether the project goes ahead or not, but it looks like our European neighbor won’t keep stretching it. It was the German Finance Minister himself, Christian Lindner, who surprised the United States by announcing this decision, announcing that your country will not accept requests from Intel concerning an increase in expenditure and investment by the German government to ensure the construction of the chip factory in the German city of Magdeburg.
The cost of such a factory amounts to 17 billion dollars, and Lindner pointed out that Germany could not afford such an additional investment, saying:
“We don’t have more funds in the budget. Right now, we’re focused on consolidating our finances, not expanding them.”
Intel first asked the German government for an investment of 6,800 million dollars, but now it would be 10,000 millionsomething that we understand will generate a conflict between the two since the amount is not similar to what was originally agreed and for which both would agree.
At the moment we know nothing more than the statements of the minister, who in no way spoke of the fact that the project would not be carried out, but that on their side they would not invest more money, therefore they would look for a deal that wouldn’t happen if it could trigger for that purpose.
Last year, the European Commission launched the European Chip Act, with the aim of allocating 43 billion dollars to the semiconductor industry in Europe. This move was attractive to companies like Intel. However, Intel currently appears to be struggling due to rising prices.
At the moment we don’t have much more information, nor if there is a plan B for Intel to consolidate its factory in another European country, although if that fails we doubt that in the short term it will there is a candidate who supports all of the brand’s claims.
For now, we’ll be keeping an eye out for the following changes and statements from both sides and we’ll see if they finally manage to end well or if they both made an enemy.
Source: Wccftech
