Intel: chip factory in Magdeburg for 17 billion euros

Magdeburg has won the race for the location of a large Intel chip factory. That’s how much the factory costs and that’s how many jobs there should be.

After Tesla, Intel is also building a huge factory in the new federal states – in Magdeburg. A triumph for Germany as a business location. This was preceded by weeks and months of intensive talks between Intel, the European Commission and representatives of European national states, such as the industry association Silicon Saxony e. V. reports.

17 billion euros for Magdeburg

Intel intends to invest up to 80 billion euros along the entire semiconductor value chain in the EU over the next ten years – from research and development (R&D) to manufacturing and state-of-the-art packaging. To begin with, Intel is providing 17 billion euros for the construction of two state-of-the-art semiconductor factories in Magdeburg. There Intel wants to produce the most modern transistor technologies and serve the demand of foundry customers.

According to Intel, Germany is “the ideal location for the establishment of a new European center for state-of-the-art chip production: the location in the heart of Europe, outstanding specialists, excellent infrastructure and an established ecosystem of suppliers and customers”.

3000 permanent jobs at Intel

Intel speaks of an expected 7,000 people who will be employed for the factories in the construction industry as well as 3,000 permanent high-tech jobs at Intel and tens of thousands of additional jobs at suppliers and partners.

Planning for the two factories is to begin immediately. Construction is expected to start in the first half of 2023, subject to the EU Commission approving the subsidy and the German authorities approving the funding. The product launch in Magdeburg should then be in 2027. Intel would be significantly slower than Tesla…

The company is also planning a new research, development and design center in France. Intel also plans to expand its R&D, manufacturing, foundry and backend manufacturing capabilities in Ireland, Italy, Poland and Spain.

Silicon Saxony e. V. enthusiastically comments on Intel’s decision:

“This is a great win for Europe’s leading high-tech cluster Silicon Saxony and all members of our industry association. GlobalFoundries, Infineon, Bosch, X-Fab, Siltronic, ZEISS, Jenoptik and soon Intel produce in the city triangle of Magdeburg, Erfurt/Jena and Dresden. The Players complement each other in their skills and competencies. This substantially strengthens the technological leadership claim of Silicon Saxony in Europe, but also in international competition. The investment by Intel will enable the companies in the ‘Silicon Saxony’ region to grow together even more. Especially the medium-sized companies, who as suppliers, right on their doorstep, will support Intel in setting up production are the big winners.In addition, our member Intel opens up new perspectives for cooperation in the field of research and development.The Silicon Saxony region will also benefit in terms of international specialists and more grow.”

Rumors leaked back in February

The Mitteldeutscher Rundfunk MDR had already reported in February that Intel wants to build its planned new chip factory “Mega-Fab” in Germany. And in Magdeburg. The capital of the state of Saxony-Anhalt prevailed against the inner-German applicants from Dresden and Penzing. Dresden in particular, where other companies are already producing chips, was considered a serious competitor for Magdeburg. But Magdeburg also had competitors outside of Germany. Cities from France and Italy had also tried to locate Intel’s chip factory.

However, Intel only announced its decision today on March 15, 2022. Saxony-Anhalt promoted the Magdeburg location with the arguments that there would be “attractive commercial areas” and a university that would train new IT talent; for example here . According to MDR, more than 1000 jobs will be created in the new factory. There is also talk that Intel wants to invest a two-digit billion amount.

The EU will support the location of the factory as part of the “EU Chips Act”. Because the EU wants to make Europe more independent of chip deliveries from non-European countries, especially from Asia. This dependency is showing its negative consequences right now with the supply bottlenecks with chips from Asia.

Intel’s factory will be the second spectacular resettlement in the new federal states in recent times. Tesla built a factory in Brandenburg in record time in 2021, which will soon be delivering vehicles.

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