Intel’s new mega factory brings a job boom to Magdeburg
Intel headquarters in Santa Clara, California. The chip manufacturer wants to build a factory in Germany
What: Bloomberg
The US chip manufacturer has opted for a German location. The new factory is to come to Magdeburg. The prerequisite for this were subsidies worth billions. WELT explains the factors with which the city was able to set itself apart from others.
Dhe chip manufacturer Intel is about to announce its location decision for its mega factory in Germany. According to several reports, the choice should have fallen on Magdeburg. Neither the state chancellery of the state of Saxony-Anhalt nor Intel wanted to confirm or comment on the decision on request.
Magdeburg would have prevailed against German competitors such as Dresden and the municipality of Penzing in Bavaria – and won one of the largest single investments in the history of the Federal Republic. The French daily Le Figaro reported last December that Intel wants to build its mega factory in Germany.
The chip company has been looking for a location for some time. It is not surprising that Germany has now won the race. After Pat Gelsinger took over as CEO of Intel last year, his first trip abroad was to Germany, where he met with high-ranking politicians. “There’s a lot to be said for Germany,” he said in an interview with the “Handelsblatt” at the time.
According to Intel, it had received more than 70 inquiries for potential locations from Europe, and the selection was later narrowed down to ten. In fact, the project is extremely attractive for the locations. Intel boss Gelsinger had put the investments for Europe at a good 80 billion euros.
In total, the settlement in Magdeburg would create more than 20,000 jobs, albeit spread over several years. Intel’s plans call for a mega-fab consisting of up to eight semiconductor factories. The city council has cleared the way for a new industrial area in the southwest of Magdeburg on the border to the Börde – with a size of more than 500 football pitches.
To start with, two such production facilities are to be built for around ten billion euros each, with the remaining factories gradually following suit. The jobs are created not only in the factories, but also at suppliers.
Magdeburg can meet a whole range of criteria that are decisive for such a location decision: a distinctive university and research landscape, qualified employees and good transport connections.
The location is in the immediate vicinity of the A14 motorway. Leipzig Airport is just over an hour’s drive away. And even Berlin-Brandenburg Airport is only 1.5 hours away by car.
According to reports, the state government of Saxony-Anhalt and its Prime Minister Reiner Haseloff (CDU) have met Intel boss Gelsinger several times. However, the preparations for the decision were largely confidential. According to Magdeburg’s Mayor Lutz Trümper, talks with the city administration were only conducted with a code name.
Intel boss Gelsinger had made it clear during his repeated visits to Europe that he expected high subsidies for his settlements. For its investments of around 100 billion dollars in Europe, Intel demands subsidies of around 40 billion dollars. Intel would also get such subsidies in Asia, where labor costs would be significantly lower. Europe would therefore also be in competition with Asia.
Apparently enough aid from the EU, the federal government, the state and also the city of Magdeburg has now come together. The European Commission recently presented its Chips Act. She wants to promote the industry with 43 billion euros. The need for this has been demonstrated by the recent semiconductor shortages, which have resulted in millions of cars not being able to be produced.
Dresden is home to Bosch, Globalfoundries and Infineon chip factories in what is known as Silicon Saxony. This makes the region Europe’s largest semiconductor location. But overall, Europe’s market share in global chip production is just under ten percent. The goal is to double this share by 2030. In the end, an even more significant increase in production is necessary because global production will also grow strongly in the next ten years.
Intel also invests large sums in other places. For the US state of Ohio, the group has announced a chip factory that will cost at least $20 billion. The volume could expand to 100 billion dollars over ten years. Intel wants to invest 20 billion dollars in the US state of Arizona. The USA also has its Chips Act and is planning aid of 52 billion dollars. The project still has to go through Congress. Intel is also expanding its factory in Ireland.
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