Intel Set to Gain $11 Billion in Subsidies for German Chip Plant

[Daniel Nenni]

• 
• 
  
• - Germany has expressed willingness to grant more aid in talks
• - Announcement on more subsidies may come as soon as Monday

Intel Corp. is reportedly set to receive approximately $11 billion in subsidies from the German government for a chip manufacturing complex in eastern Germany. The construction of the plant, initially agreed upon in Magdeburg with €6.8 billion ($7.2 billion) in government aid, was postponed due to economic challenges, leading Intel to request additional funds. Germany has indicated a willingness to provide around €10 billion as part of ongoing negotiations. The sources providing this information have chosen to remain anonymous as the details have not been publicly disclosed.

Bloomberg: Intel Set to Gain $11 Billion in Subsidies for German Chip Plant​

 

[hist78]

"Final negotiations will take place this weekend, the newspaper reported, with Intel Chief Executive Pat Geisinger and government representatives to sign an agreement in Berlin on Monday."

"The additional funds are to come from a budget under the responsibility of the economy minister, who campaigned heavily for the extra subsidies in the face of resistance from Finance Minister Christian Lindner, according to Handelsblatt."

Intel near deal on 9.9 bln euro German government subsidy, Handelsblatt says

Intel and the German government are close to an agreement for the chipmaker to receive 9.9 billion euros ($10.83 billion) in subsidies, up from a previously agreed 6.8 billion, Handelsblatt reported on Thursday, citing government sources.

www.reuters.com

 

[ta152h]

Intel had the stronger hand, and they knew it. So did Germany. I'm glad this didn't have to get ugly. Or maybe it did.

 

[tooLongInEDA]

"Wahnsinn" (as they say in Germany).

If we take this report from Intel's Ohio project as a baseline:

"As the largest single private-sector investment in Ohio history, the initial phase of the project is expected to create 3,000 Intel jobs and 7,000 construction jobs throughout the build. It is also expected to sustain tens of thousands of added regional long-term jobs across a wide ecosystem of suppliers and associates."

that would seem to work out at a state subsidy of over $3 million per direct fab job created. Yes, some other jobs in related activities are also created. But there's a point where it's cheaper just to hand people the cash instead.

Classic spending other people's money on something for somebody else (Milton Friedman). This is what you get.

 

[Tanj]

Classic spending other people's money on something for somebody else (Milton Friedman). This is what you get.

That is also the operative definition of much top management. The money was going to come from someone, and be spent on some other folks. The negotiations just shuffled the who and the why - what money was counted (tax breaks, land made available, may have counted as much of the subsidy) and what benefits were obtained (agreements on employment, duration, labor representation, etc.).

"kitchen economics" does not describe national finances. For example, the USA has a GDP around $20Tn but a net asset value of $140T or so (7x GDP) so a lot of public policy putting capital to work should be about maintaining the general viability of the economy on which those multiples stand. And the past few years have taught that stability and diversity in semi supply chain needs to be part of a viable advanced economy. I think their bet is not a risk so much on the money, as did they choose the right company to bet it on.

 

[VCT]

Intel to invest $4.6 billion in new chip plant in Poland

Intel plans to invest up to $4.6 billion in a new semiconductor assembly and test facility near Wrocław, Poland, as part of a multi-billion-dollar investment drive across Europe to build chip capacity, it said on Friday.

www.reuters.com

 

[Daniel Nenni]

BERLIN (Reuters) -Chancellor Olaf Scholz will meet with Intel CEO Pat Gelsinger on Monday, a potentially significant moment in talks to set up a new chip-making complex on German soil.

Germany is in intensive discussions with Intel, the economy ministry said on Friday, without commenting on how much state funding the company is set to receive for the project.

Scholz, asked at an unrelated news conference whether a deal would be finalised on Monday, said: "I confirm that we have been in good discussions for some time and will continue to do so on Monday."

An economics ministry spokesperson earlier said the government had a clear goal.

"We want to strengthen Germany as a location for microelectronics. This is highly important for transformation and technological sovereignty, and for this reason we are conducting intensive talks," the spokesperson said.

She did not say how much the company would receive in state subsidies for the site in the central German city of Magdeburg.

On Thursday, the Handelsblatt business daily reported that the U.S. company is expected to receive 9.9 billion euros ($10.84 billion) in subsidies, up from a previously promised sum of 6.8 billion euros.

Handelsblatt had reported that final negotiations would take place over the weekend.

Intel said in a statement on Friday it plans to invest up to $4.6 billion in a new semiconductor assembly and test facility near Wrocław in Poland as part of a multi-billion-dollar investment drive across Europe to build chip capacity.

Germany's Scholz to meet Intel CEO amid intensive talks on chip plant

BERLIN (Reuters) -Chancellor Olaf Scholz will meet with Intel CEO Pat Gelsinger on Monday, a potentially significant moment in talks to set up a new chip-making complex on German soil. Germany is in intensive discussions with Intel, the economy ministry said on Friday, without commenting on how...

www.aol.com

​

 

[hist78]

BERLIN (Reuters) -Chancellor Olaf Scholz will meet with Intel CEO Pat Gelsinger on Monday, a potentially significant moment in talks to set up a new chip-making complex on German soil.

Germany is in intensive discussions with Intel, the economy ministry said on Friday, without commenting on how much state funding the company is set to receive for the project.

Scholz, asked at an unrelated news conference whether a deal would be finalised on Monday, said: "I confirm that we have been in good discussions for some time and will continue to do so on Monday."

An economics ministry spokesperson earlier said the government had a clear goal.

"We want to strengthen Germany as a location for microelectronics. This is highly important for transformation and technological sovereignty, and for this reason we are conducting intensive talks," the spokesperson said.

She did not say how much the company would receive in state subsidies for the site in the central German city of Magdeburg.

On Thursday, the Handelsblatt business daily reported that the U.S. company is expected to receive 9.9 billion euros ($10.84 billion) in subsidies, up from a previously promised sum of 6.8 billion euros.

Handelsblatt had reported that final negotiations would take place over the weekend.

Intel said in a statement on Friday it plans to invest up to $4.6 billion in a new semiconductor assembly and test facility near Wrocław in Poland as part of a multi-billion-dollar investment drive across Europe to build chip capacity.

Germany's Scholz to meet Intel CEO amid intensive talks on chip plant

BERLIN (Reuters) -Chancellor Olaf Scholz will meet with Intel CEO Pat Gelsinger on Monday, a potentially significant moment in talks to set up a new chip-making complex on German soil. Germany is in intensive discussions with Intel, the economy ministry said on Friday, without commenting on how...

www.aol.com

​

It would be a good reminder to US government, local and federal, about what they can do to ensure the same problems won't happen in the American Chips Act's execution.