Wednesday, March 8th 2023

Intel Ups Demand on Subsidies from German Government for New Fab to €5 Billion

Last month, reports were saying that Intel wanted an additional €3.2 billion from the German government in subsidies to build its fab in Magdeburg, but apparently that wasn't nearly enough, as the company has increased its demands to somewhere between €4 billion to €5 billion. What triggered Intel to go ask the German government for even more cash is most likely a combination of things, as Intel is going to want to cover increases in costs courtesy of interest hikes and the inflation that's going on globally, alongside soaring energy prices in Europe. The expected cost of the new fab is said to have increased from €17 billion to €30 billion, which is not exactly pocket change.

In a statement to Bloomberg, Intel said that "disruptions in the global economy have resulted in increased costs, from construction materials to energy," and continued "We appreciate the constructive dialogue with the federal government to address the cost gap that exists with building in other locations and make this project globally competitive." The construction start of the Magdeburg fab has already been delayed and according to Bloomberg, Intel is also considering delaying its planned assembly factory in Italy. It doesn't look promising for either party, as Intel seems to want to spend as little as possible on building its new facilities, while expecting various governments around the world to prop it up until the new facilities are making money. Hopefully neither nation will agree to Intel changing the terms of the deals, as it could cost more nations more than they would earn in long term revenue from Intel.
Sources: Bloomberg (paywall), via @dnystedt (on Twitter)
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34 Comments on Intel Ups Demand on Subsidies from German Government for New Fab to €5 Billion

#26
Ferrum Master
Vayra86I'm still trying to wrap my head around Germany's nuclear exodus.
Because they got addicted to Russian gas... or money... call whatever it is... corruption and thanks to Frau Merkel and their decade long political stagnation.

EU from technological point should write down notes what RAMBUS does and how operates, also should peek how the small Japan does their business. But hey... we need to do something stupid again.
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#27
stimpy88
Nice business tactics there Intel! When the balloon goes up over Taiwan, you will be there as a power for good, right?
Posted on Reply
#28
Aleksandar_038
kondaminGermany's GDP is ~4.4Trillion USD, about 10% of that goes in to education
Yes 5billion is a lot of money, but it wouldn't do much education wise.

They would probably save 100billion if education became sane again and made students write stuff in little workbooks instead of handing out 20pages of copies per student per lesson.
Yes, because cutting on education worked great so far. That is why they have lack of teachers, medical workers, engineers...

And when they cut on education, just to build new Intel fab, who is going to work there? Imported engineers from where exactly? Japan? China?

It is crazy to give such money to private company, even if it is Intel. They can invest it in infrastructure and their own energy security (which is now non-existant and additionally, much tougher problem to solve), that will attract companies to come... But to give to private company, it is waste of money for sure!
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#29
Prima.Vera
Most of those moneys are estimated land price and tax deduction for the land. Could also include some construction cost, but not entirely.
It's not a big deal, just the press is making it more sensationalist.
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#30
TheLostSwede
News Editor
trsttteIs an Intel fab in Europe even usefull? 5 billion seems like a lot for a few political points, companies that work with more general semi conductors (pmic, micros, etc.) would be more useful, or simply other technology fields like batteries where US subsidies are drawing everyone in (even das Volkswagen)
That's on top of the €6.8 billion already promised.
www.techpowerup.com/295773/germany-to-give-intel-eur6-8-billion-towards-magdeburg-fab
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#31
trsttte
Vayra86Its a 10x better solution than covering the entire country or seas with renewable. We don't have that space at all and it'll destroy many more opportunities to promote biodiversity than nuclear...
That's debatable. I like nuclear power but it's actually much more expensive than people think. Not only are the reactors expensive and require a lot of upkeep, we don't really have a solution for the contaminated material other than "wait it out". It's mostly safe but it takes multiple decades to clean up a site, time often not accounted for where the plant is useless and not producing any $$$ coffcoff I mean energy

Renewables are cheap both short and long term and we have a lot of space to build them on, even more with recent advances on floating wind farms that can be placed in higher depth locations or floating solar.

What nuclear gives is a strong base load that is, let's call it politically stable: a strong interconnected grid with renewables and storage can have the same uptime stability but it's easier to sell a gas/coal/nuclear plant instead.
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#32
ThrashZone
Vayra86I'm still trying to wrap my head around Germany's nuclear exodus. They choose to depend entirely on imported energy, while its a key resource for their entire geopolitical strength and presence. They're fucking idiots, honestly. They've already 'turned around' on the military stance, I'm baffled their energy policy wasn't revised alongside it. The US has always understood that very well. Energy is a national security issue.

I sincerely hope the Netherlands is going forward on building one or several nuclear power plants. Its a 10x better solution than covering the entire country or seas with renewable. We don't have that space at all and it'll destroy many more opportunities to promote biodiversity than nuclear...
Hi,
Not always it really depends on which side is in office, atm not to much seeing they don't mind high feul prices "war on oil matter of fact" until close to an election cycle and last cycle open the strategic oil reserves even though US have plenty of local oil on hand but are exporting to fill try and fill the Russian gap.
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#33
the54thvoid
Intoxicated Moderator
Fukushima. Why Germany abandoned nuclear. Silly decision from a country untroubled by tsunamis and terrible design decisions.
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#34
Vayra86
the54thvoidFukushima. Why Germany abandoned nuclear. Silly decision from a country untroubled by tsunamis and terrible design decisions.
Public fear and the impossible question of whether that is rational or irrational fear. The fear itself is real... and it touches on a principle of human ingenuity: can we, or can we not trust in something to be built and be absolutely safe. We know from reality that nothing is 100% safe... But then we fail to realize nothing in life is 100% safe even if you never build a nuclear plant to begin with. Good luck defining how rationale comes into play here :D Science says 'safe enough' or, 'as safe as we can make it, and we continuously try to increase the safety'.... both statements aren't exactly reassuring if you're living near a plant...

Personally I like the comparison to planes. They barely ever fall out of the sky, except when they're pushed way beyond their expiry date, are called Tupolev (I jest, but only in part), or are somehow built on new design or technology. That's not entirely reassuring either, even if 99,999% of all flights are fine.

I'm all for more nuclear. But then... I consider that we're also looking at pretty much unstoppable, and exponential-ish events connected to, climate change. Who's to say we won't have earthquakes or tsunami's in Western Europe? Weather conditions are already progressing into new extremes YoY. Damned if you do... damned if you don't? And what about flooding... Germany's seen how that works quite recently.

Its interesting to see the differences in perspective on this subject between countries. In the Netherlands there's a strong pro and con lobby, I'm not even sure which one is more prevalent, but the main argument of con nuclear isn't safety... its actually the statement 'you'll slow down our transition to 100% renewable'.
ThrashZoneHi,
Not always it really depends on which side is in office, atm not to much seeing they don't mind high feul prices "war on oil matter of fact" until close to an election cycle and last cycle open the strategic oil reserves even though US have plenty of local oil on hand but are exporting to fill try and fill the Russian gap.
The Russian gap is in every possible way a matter of national security though... and money. Lots of money. But let's steer clear of the rep/dem debate ;)
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