"This investment will put us up there with the best in the world"

"We have spent the last few weeks in tough negotiations to come up with a deal for a viable declaration of intent," said Robert Habeck, Federal Minister for Economic Affairs and Climate Action, on the day when the Federal Government signed its investment agreement with Intel.

"By investing in Germany, Intel is significantly expanding its manufacturing capacities in Europe," the Federal Minister went on to explain. This shows that Germany is a highly attractive location. "We are at the cutting edge of global competition and are securing sustainable and qualified jobs as well as value creation," he added: "This is our opportunity to create a new, viable, thriving and cutting-edge microchip sector in Germany and Europe, which will benefit companies throughout the entire microelectronics production value chain as well as in the user industries."

Intel will be investing over 30 billion euros

Intel will be investing more than 30 billion euros in Magdeburg at the same time as creating some 3,000 in-house jobs. It is also expected that the construction of the manufacturing facilities will create another 7,000 or so jobs. Many additional jobs will also be generated in the industrial sector. 

Federal Chancellor Olaf Scholz referred to the agreement as an important step in terms of positioning Germany as a high-tech location as well as in terms of resilience. He also said that this investment would enable Germany to catch up with the world's technology leaders and expand its own capacities for ecosystem development and the production of microchips, which, he said was good news for Magdeburg, Germany, and the rest of Europe.

The Federal Government to provide support for the Intel site

The Federal Government intends to draw down funding under the new European Chips Act to support the construction of the new Intel site in Magdeburg and is prepared to invest up to 9.9 billion euros to do so. This funding is subject to approval by the European Commission under state aid legislation.

 "Both Germany and the European Union wish to increase the resilience of the European semiconductor industry as a strategic goal and thus make Europe as a whole more resilient," Habeck explains: "This is important in terms of European sovereignty, and we are consistently and successfully working towards this goal."

The European Chip Act will require the EU to mobilise 43 billion euros in public and private investment as well as introducing measures to help EU Member States and international partners to better prepare for and to be able to counter future supply chain disruptions more rapidly.

The European Commission approved the IPCEI (Important Project of Common European Interest) Microelectronics and Communication Technologies on 8 June with the aim of placing the European semiconductor industry on a stronger footing, thus paving the way for funding around 100 European projects. Specifically, this will enable the Federal Ministry for Economic Affairs and Climate Action and 11 federal states to provide several billion euros in funding for 31 projects.

Other projects

The US American semiconductor manufacturer Wolfspeed and the German company ZF Friedrichshafen announced a joint partnership for the construction of a microchip production plant in Saarland back in February 2023. The plan is to produce state-of-the-art silicon carbide chips at the site of the former coal-fired power plant in Ensdorf: these are essential in the automotive industry as well as in the energy production and supply sectors.

Work also recently began on a new Infineon semiconductor production facility in Dresden, which is scheduled to start production in autumn 2026. Among other things, the microchips produced there will be used in the power supply sector in energy-efficient charger components, for example, as well as in small actuators in cars, data centres, and internet applications.