Intel will get €6.8 billion ($7.3 billion) in funding from the European Chips Act while it constructs and commissions its mega facility in Magdeburg, Germany. The decision was announced on Friday by Martin Kröber, a member of the Bundestag from Magdeburg (Social Democratic Party), and the amount of funding due this year was confirmed in a federal budget statement.
Raising a new chip fab from the ground is a complicated, time-consuming, and expensive procedure. The ‘Silicon Junction’ development in Magdeburg is expected to break ground in H1 2023 and be finished by 2027. Two massive chip fabs will be located at Silicon Junction. Intel disclosed in March that these will be advanced Angstrom-era fabs with ambitions to create nodes such as the Intel 20A and beyond. The fabs will produce Intel-branded chips as well as partner products through Intel Foundry Services (IFS).
According to the government budget declaration, €2.72 billion ($2.91 billion) has been set allocated for the Magdeburg development this year. This is a sizable piece that is ideal for a job like this. Intel will get a total of €6.8 billion to assist in the development of this advanced node plant. The EU Chips Act funding is capped at 40% of the entire cost of the megafan, implying that the facility will cost €17 billion ($18.2 billion) to construct.
The Magdeburg Silicon Junction, built by Intel, will have a significant economic influence on Saxony-Anhalt
7,000 temporary employment and 3,000 permanent jobs are planned to be created. “The agreement benefits the entire state of Saxony-Anhalt,” Kröber said. Thousands of new jobs will be created at suppliers and partners, as well as a broader boost to the local service industry, merchants, and other businesses, as is customary with the entry of a large employer.
In February 2022, the EU Chips Act was passed, with €43 billion ($46 billion) set aside to boost computer industry investment and development. So far, Germany has been one of the greatest gainers. Intel is also planning a €17 billion ($18.2 billion) investment in Ireland. Plans in France, Italy, Poland, and Spain are receiving smaller but important expenditures totaling €4.5 billion ($4.8 billion). The aforementioned investment amounts indicate Intel’s 60 percent capital, which should be matched by the countries’ 40 percent EU Chips Act funds.
The EU Chips Act’s overarching goal is to achieve a manufacturing target of 20% of global semiconductor output by 2030. Currently, the European Union produces about 9% of all semiconductors produced worldwide. The EU Chips Act (a $52 billion subsidy program) was inspired by the US Chips Act. It has the same goal in mind: to secure vital supply chains by locating important high-tech inputs of production.
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