In a significant boost to the German high-tech production landscape, Intel has signed a revised letter of intent with the German federal government for its ambitious wafer fabrication site in Magdeburg.
The agreement, which reflects the expanded scope and changing economic conditions, includes Intel’s increased investment of over EUR30 billion for two state-of-the-art semiconductor facilities in Europe.
According to a press release by the firm, the government has also pledged enhanced support, including incentives, making this project the largest foreign direct investment in German history.
“Having acquired the land in November 2022, Intel plans to commence production at the first facility within the next four to five years, subject to approval from the European Commission for the incentive package. The revised timeline and scale of investment have prompted Intel to deploy more advanced Angstrom-era technology at the Magdeburg site than initially anticipated,” the firm stated.
The facilities will cater to Intel products as well as Intel Foundry Services customers.
Recently, Intel chose a location near Wrocław, Poland, for its $4.6 billion new state-of-the-art semiconductor assembly and test facility to be ready by 2027; that will support around 2,000 Intel employees, and its construction is expected to create numerous additional jobs.
Intel Chief Executive Officer (CEO) Pat Gelsinger expressed his enthusiasm, stating, “Building the ‘Silicon Junction’ in Magdeburg is a critical part of our strategy for Intel’s growth. This investment, combined with our recent announcement in Wrocław, Poland, and our existing sites in Ireland, establishes an unparalleled capacity corridor that spans from wafers to complete packaged products. It is a significant stride towards achieving a balanced and resilient supply chain for Europe. We extend our gratitude to the German federal government, Chancellor Olaf Scholz, and the government of Saxony-Anhalt for their partnership and shared commitment to realizing a vibrant, sustainable, leading-edge semiconductor industry in Germany and the EU.”
Chancellor Olaf Scholz emphasized the importance of the agreement, stating, “Today’s agreement marks a crucial milestone for Germany as a high-tech production hub and enhances our resilience. Intel’s semiconductor production in Magdeburg represents the largest foreign direct investment in our country’s history. This investment will enable us to catch up technologically with the world’s best and expand our capacities for the development and production of microchips. It is excellent news for Magdeburg, Germany, and the entire European region.”
The Silicon Junction in Magdeburg will serve as a pivotal connection point for innovation and manufacturing centers across the country and region.
It aims to cultivate a diverse ecosystem of suppliers and technology companies within the industry. The construction phase of the project is expected to generate 7,000 jobs, while approximately 3,000 permanent high-tech positions will be created at Intel.
Additionally, tens of thousands of supplementary jobs are anticipated across the industry ecosystem.