Intel’s decision to postpone its highly anticipated chip manufacturing projects in Germany and Poland for two years has sparked disappointment and discussion throughout Europe.
The US chipmaker, suffering lower-than-expected demand for its goods, announced on Monday that it would postpone factory expansion by two years, throwing a blow to heavily subsidized enterprises viewed as critical to boosting the EU’s semiconductor production. The project delays follow months of haggling over higher subsidies.
In Germany, Intel has obtained almost $11.1 billion in government backing — approximately $3.33 billion more than initially pledged — to launch the $33 billion chip facility in Magdeburg. Construction was supposed to start in 2023 but was halted as inflation caused by the war in Ukraine hindered financing negotiations.
Poland has also committed $1.8 billion to a semiconductor factory in Wroclaw, hoping to leverage Europe’s efforts to reduce reliance on Asian chip producers.
The projects were part of the EU’s larger effort to protect its technology industry after pandemic-related shortages and geopolitical tensions highlighted the dangers of supply chain dependency.
Despite the setback, German Chancellor Olaf Scholz reassured the public on Tuesday that Intel remained dedicated to its plans in Germany, stating that the delay was solely a “business decision”.
“It is important for us to take this opportunity to expand our semiconductor capacities in Germany,” Scholz said, emphasizing that the project is still expected to proceed after the two-year hiatus.
Economy Minister Robert Habeck echoed Scholz’s remarks, stressing that Germany remains committed to expanding semiconductor manufacturing in Europe.
