Germany allocates 10 billion euros to get rid of Chinese chips

2023-06-17 10:11:22

electronic chips


Germany is about to conclude an agreement with the American company “Intel” to establish a chip factory

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Germany has allocated 10 billion euros to build a factory for smart chips, in the latest Western attempt to get rid of China’s dominance in this market, and to dispense with these chips, of which China and the United States are the most important producers in the world.

A report published by the British newspaper “Financial Times” and viewed by said that Germany is about to conclude an agreement with the American company “Intel” worth 10 billion euros to build a large chip factory at a time when European countries are racing to reduce their dependence on Asian suppliers of semiconductors. .

Two informed sources said that the American company “Intel”, which produces semiconductors, “is close to reaching an agreement” with the German government in Berlin regarding the construction of a huge factory in the eastern city of Magdeburg.

The sources said progress in the talks means the US chipmaker will receive an additional 3 billion euros on top of the previously announced 6.8 billion euros in subsidies from Berlin.

Intel has argued that the initial package of state support has become insufficient due to inflation and rising energy costs. A person close to the management said the cost of building the plant had risen from 17 billion euros to around 20 billion euros. The project will be one of the largest ever foreign direct investments in Germany.

According to the “Financial Times,” the deal will represent a victory for German Economy Minister Robert Habeck, who pushed his country to keep pace with the massive support provided by the Joe Biden administration under the chip law, which includes $ 52 billion in financing to boost domestic semiconductor manufacturing in the United States.

The news comes days after Finance Minister Christian Lindner told the Financial Times that he would resist increasing the level of support for the company even if it promised to expand the scope of the project.

Sources familiar with the talks said discussions on the final details were continuing, according to the Financial Times.

A spokesman for chancellor Olaf Schultz confirmed Friday that he will meet Pat Gelsinger, CEO of Intel, on Monday in Berlin. News of the impending deal came as Intel also announced plans to build a $4.6 billion semiconductor assembly and test plant in Poland, which the company said would help meet “critical demand for assembly and test capacity.”

The company expects the factory in Poland to be ready by 2027, the same year the Madberg facility in Germany is expected to come online.

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