Intel reveals plan to build new $33B chip plant in Germany with government help
Intel, a chipmaking giant, is looking to construct chip manufacturing plants in Germany and Israel
Intel's spree of chip plant building has spread to Germany.
The chipmaker and the German government signed a deal Monday that will see the U.S. company spend more than 30 billion Euros ($32.8 billion) to build a chip manufacturing site in the eastern city of Magdeburg.
Germany is helping the effort, pledging to cover a third of the investment.
Word of the agreement came as German Chancellor Olaf Scholz met with Intel CEO Pat Gelsinger in Berlin on Monday.
INTEL PICKS MAGDEBURG IN GERMANY FOR NEW EUROPEAN CHIP FACTORY
Pictured: Intel logo hangs at the World Economic Forum 2022 in the Alpine resort of Davos, Switzerland. (REUTERS/Arnd Wiegmann/File Photo / Reuters Photos)
Intel acquired the land for two semiconductor facilities in Magdeburg in November, although production is not expected to start for another four or five years.
"The investment in Germany means a significant expansion of Intel's production capacity in Europe and is the biggest investment ever made by a foreign company in Germany," Economy Minister Robert Habeck, who is also the country's vice chancellor, said in a statement.
The German government confirmed that it will provide 9.9 billion euros toward the total.
German Chancellor Olaf Scholz, right, and Intel CEO Pat Gelsinger attend the signing ceremony of an agreement between the German government and the company at the Chancellery in Berlin, Germany, Monday, June 19, 2023. ((AP Photo/Markus Schreiber) / AP Newsroom)
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The plan still needs the approval of the European Union's executive branch before it is finalized.
The approval is a step to make sure the deal doesn't give Intel an unfair advantage over its competitors.
Intel also plans to construct a new factory in Israel, Prime Minister Benjamin Netanyahu said on Sunday.
The company will spend $25 billion on the facility, Reuters reported.
Intel Processor Core i5 2500K (iStock / iStock)
The factory in Kiryat Gat is due to open in 2027, to operate through 2035 at least and to employ thousands of people, Israel's Finance Ministry said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| INTC | INTEL CORP. | 24.84 | +0.49 | +2.01% |
In January 2022, Intel announced plans to build two new facilities, injecting around $20 billion of value into Ohio’s economy. The plans have the potential to generate 20,000 jobs.
The Associated Press contributed to this report.