BERLIN (AP) — Intel and the German government signed a deal on Monday that would see the U.S. company invest more than 30 billion euros ($32.8 billion) in a chip manufacturing site in the German city of Magdeburg, with the financial support of Berlin.
The deal was announced when German Chancellor Olaf Scholz met Intel CEO Pat Gelsinger in the German capital.
Intel acquired the land for two semiconductor facilities in Magdeburg, eastern Germany, in November, and the company says the first of them should start production in four or five years.
“The investment in Germany signifies a significant expansion of Intel’s production capacity in Europe and is the largest investment ever by a foreign company in Germany,” said Economy Minister Robert Habeck, who is also vice-chancellor of the country, in a press release.
Plans, before the revised letter of intent was signed on Monday, called for a total investment of at least 17 billion euros.
Habeck’s ministry said the government intends to support the project financially, a plan that will need to be approved by the executive branch of the European Union.
Neither he nor Intel gave details of the incentives. German news agency dpa, which did not name its sources, reported that the government planned to provide 9.9 billion euros.
The “Silicon Junction” project in Magdeburg adds to Intel’s plans for an assembly and test facility near Wroclaw, Poland, and an existing chip factory in Ireland.
In a speech Monday to Germany’s top industry lobby group, Scholz highlighted efforts to encourage chip production in Europe, reducing his country’s dependence on imported chips and blockchains. global supplies.
If all the investment plans currently being considered are implemented, “and we are working on it, including today, Germany will become one of the world’s major production sites for semiconductors”, he said. declared.