With new investments from chipmaker Intel, Europe is on the way to becoming a high-tech hub. A large factory is to be built in Magdeburg. Politicians speak of the largest company settlement in East Germany in recent decades.
Great prestige success for Germany as a high-tech location: Magdeburg has been awarded the contract for a large chip factory by the US group Intel, as the world’s largest chip manufacturer announced on Tuesday.
In total, around 80 billion euros are to be invested in the next few years in order to create a “next-generation, ultra-modern semiconductor ecosystem” at several locations in Europe. Politicians are jubilant about the plans and hope that Germany will become a leading location for semiconductor production.
The biggest beneficiary is the state capital of Saxony-Anhalt. “In the first phase, we are planning investments of 17 billion euros for the construction of two brand new, unique semiconductor factories in Magdeburg,” said Intel CEO Pat Gelsinger in a video stream. Up to six more factories are planned there in the coming years. The US company also wants to invest in other projects in the areas of research, development and design in Europe. All locations are to be supplied with renewable energy.
Start of production 2027
Construction work in Magdeburg should start by spring 2023 at the latest. Production is scheduled to start in 2027. The newly created industrial area covers 450 hectares – this corresponds to the area of around 620 football pitches. According to Intel, around 3,000 high-tech jobs could be created, as well as tens of thousands of additional jobs at suppliers. In Magdeburg, the company wants to produce processors and graphics chips that will be sold under its own brand. At the same time, the Californian group also wants to work as a contract manufacturer for third-party customers as part of Intel Foundry Services (IFS).
The federal government wants to support the settlement financially. The traffic light parties SPD, Greens and FDP want to make Germany a global location for the semiconductor industry. The first production facility of its kind in the EU will help rebalance global silicon capacities and create a more resilient supply chain, said Chancellor Olaf Scholz (SPD). Federal Minister of Economics Robert Habeck (Greens) also sees an important stimulus for the economy in difficult times. The German location prevailed in Intel’s Europe-wide selection process, Habeck continued. “This shows that Germany is attractive for innovations and investments.”
Economic map needs to be repainted
Other German and European locations had also applied. The Intel decision is “the largest corporate investment in East Germany in recent decades,” said the Federal Government Commissioner for East Germany, Carsten Schneider. This investment means the chance for reindustrialization. “The economic map can be redrawn with it.”
EU Commission President Ursula von der Leyen said in a video message that the goal is to have a fifth of global microchip production in Europe by 2030. She sees the investments as a first major success in making Europe a leading location in semiconductor production.
Intel boss Gelsinger pointed out that the exact extent of the state support is currently still confidential, but will be published at the appropriate time. The main issue here is to compensate for government support for the chip industry in Asia. “Asian countries have worked to attract the semiconductor industries.” At the same time, the chip industry in Europe has shrunk. “State aid (in Europe) is now intended to restore balance and make European investments competitive again.”
A dream comes true for the prime minister
In Saxony-Anhalt, a lot of effort has been put into Intel, as Prime Minister Reiner Haseloff (CDU) said. “The fact that it worked is a dream come true. This is the strategic investment for the IT society of the 21st century,” says Haseloff. “This will shape the economic development, image and industry structure of our state for decades to come.”
The once undisputed chip giant Intel has come under a lot of pressure in recent years. The former major customer Apple has switched to its own chip developments and has its chips produced by the contract manufacturer TSMC. Intel’s most important competitors, above all AMD and Nvidia, also get their chips from the Taiwanese group. Also, Intel has largely missed out on the smartphone business in recent years. The technology from the British chip designer ARM, which is used by Apple and almost all manufacturers of Android smartphones, dominates here. Gelsinger is now trying to get the world’s largest chip manufacturer on course with an enormous investment program.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
