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(Bloomberg) -- Intel Corp. is seeking an additional 4 billion to 5 billion euros in subsidies from the German government to move ahead with a chip manufacturing complex in the eastern part of the country, according to people familiar with the matter. Most Read from BloombergMeta Plans Thousands...
"Intel had originally estimated that the project in Germany would cost 17 billion euros but now expects to spend 30 billion, according to the people familiar with the situation."
Scope. Originally the Germany project was supposed to be one small fab. I think intel mentioned how they want to make a much larger site there now after EU chips and German contributions became a thing, but I don’t remember where I saw this. Building two fabs instead of one would also easily explain the slightly less than doubling of cost. As mentioned in the article inflation has also hit continental Europe much worse than it has hit the US, and energy prices and supply are higher and more volatile than in the nations intel currently has fabs in.
Intel was always planning for two fabs there.
Personally, I think they undershot in the first place. A 17B pricetag is much too low for two 14A/12A/10A fabs (whichever node it is).
I remember the christening of the Dresden fabs. GF had Angela Merkel there and they built a special platform so she could see the clean room without wearing a bunny suit. I wondered why there was not more government $$$ involvement. GF was just a bit early on their journey I guess. They had also planned a fab in Dubai? Interesting times.
Intel was always planning for two fabs there.
Personally, I think they undershot in the first place. A 17B pricetag is much too low for two 14A/12A/10A fabs (whichever node it is).
Upon doing some digging your right. Both Ohio and Mag were supposed to be 2 fabs and 3000 jobs. The 17B euros vs 20B USD could easily be explained away by currency conversions at the time. For a fully stocked fab I agree 20B USD is too low. Given the low price and intel's statement that they will build out shells and fill them with equipment as IFS customers sign wafer agreements, I think that might just be the cost of the shells/some tools/the offices/the support facilities.
I remember the christening of the Dresden fabs. GF had Angela Merkel there and they built a special platform so she could see the clean room without wearing a bunny suit. I wondered why there was not more government $$$ involvement. GF was just a bit early on their journey I guess. They had also planned a fab in Dubai? Interesting times.
I found my notes on it. It was the 2015 FD-SOI launch. Here are some quotes that were published:
“Fab 1 has a proud history of delivering leading-edge semiconductor technologies that have changed the world,” said Sanjay Jha. “Today, we are here to celebrate the launch of another technology innovation that will drive the next wave of the digital revolution.”
“22nm FD-SOI is a technology made and manufactured in Europe for world markets’, said Rutger Wijburg. “It is the culmination of ground-breaking work done in the French cluster and will strengthen the European SC supply chain.”
“The fabless semiconductor industry is a force of nature” said Daniel Nenni. “You can either harness the power or be overwhelmed by it.”
It started as AMD and become GF later, but all the bulk of the investments (AMD and GF eras) were during the period of relaxation of EU State Aid limitations for former East Germany. Now Germany cannot give out the same conditions as that transition period is over. Any subsidy now need submission to and approval by EU Commission DG Competion (Mrs Vestager) and the process is complicated, painful and has hard limits on the maximum rate of subsidy that could be given. The internal market rules are killing EU competitivity as DGComp is refusing to see that competition is with other world regions and not among member states. US and China have massive direct and indirect subsidies under forms that are ruled illegal within EU.
Scope. Originally the Germany project was supposed to be one small fab. I think intel mentioned how they want to make a much larger site there now after EU chips and German contributions became a thing, but I don’t remember where I saw this. Building two fabs instead of one would also easily explain the slightly less than doubling of cost. As mentioned in the article inflation has also hit continental Europe much worse than it has hit the US, and energy prices and supply are higher and more volatile than in the nations intel currently has fabs in.
Inflation is a good reason but change the scope might be problematic, especially for an additional $5 billion taxpayers money.
Intel will have hard time to use the same approach in the US because US Government will be worried about Samsung, TSMC, Globalfoundries, TI, Microns, etc. demanding the same thing. It can cause the Chips Act out of control.
Upon doing some digging your right. Both Ohio and Mag were supposed to be 2 fabs and 3000 jobs. The 17B euros vs 20B USD could easily be explained away by currency conversions at the time. For a fully stocked fab I agree 20B USD is too low. Given the low price and intel's statement that they will build out shells and fill them with equipment as IFS customers sign wafer agreements, I think that might just be the cost of the shells/some tools/the offices/the support facilities.
It's definitely not just the shells. The shell for the significantly larger D1X Mod 3 was about $3B. Perhaps it was one shell and one full fab, but that seems a bit odd.
Although comparing it to the Ohio fab does make sense, given that the Magdeburg fab was planned for a year or two after the Ohio one, you have to account for a more capital intensive node.
"Intel had originally estimated that the project in Germany would cost 17 billion euros but now expects to spend 30 billion, according to the people familiar with the situation."
It's definitely not just the shells. The shell for the significantly larger D1X Mod 3 was about $3B. Perhaps it was one shell and one full fab, but that seems a bit odd.
Although comparing it to the Ohio fab does make sense, given that the Magdeburg fab was planned for a year or two after the Ohio one, you have to account for a more capital intensive node.
Keep in mind D1 has a full site and support facilities while these other sites are green field and need to build everything from scratch. Like I said I think there is some equipment in the bundle as I assume the EU and US G won’t pay for empty shells, but I don’t think that this little money can fully build a greenfield site an expansion and fill it out with all of the tools.
