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)
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.
34 Comments on Intel Ups Demand on Subsidies from German Government for New Fab to €5 Billion
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.
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!
It's not a big deal, just the press is making it more sensationalist.
www.techpowerup.com/295773/germany-to-give-intel-eur6-8-billion-towards-magdeburg-fab
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.
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.
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'. 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 ;)