Friday, June 16th 2023

Intel to Get 9.9 Billion Euros in State Subsidies for German Facility

by
AleksandarK
 Discuss (17 Comments)
Intel has been planning to build its next-generation semiconductor manufacturing plant in Germany for a long time. Today, we have more information thanks to the Handelsblatt business and financial newspaper. According to the Handelsblatt, Intel is in talks with the German government to get as much as 9.9 billion Euros in state subsidies, a target price much higher than the previously agreed 6.8 billion Euros. Federal Economics Minister Robert Habeck has been reportedly working intensively to get the amount of state aid for Intel to be this high. Intel's CEO Patrick Gelsinger is supposed to seal the deal on Monday when he will sign the agreement in the Chancellery.

As reported, the location of the next-generation facility will be Saxony-Anhalt, with the more precise location to be known on Monday. Also, we expect to hear what manufacturing node will the upcoming facility produce at the beginning.
Source: Handelsblatt

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17 Comments on Intel to Get 9.9 Billion Euros in State Subsidies for German Facility

#5
lemonadesoda
Why state subsidies to an extremely profitable company? Small companies and individuals have to fund this through higher average taxes 'cos money don't grow on trees.
Posted on Reply
#6
Wirko
In Germany, state governments and municipalities own banks and large investment funds that invest in industry. I don't know but I can guess that Intel was offered money in exchange for an ownership share in the fab, but they said no, we only understand subsidies.
Posted on Reply
#7
lemonadesoda
There’s no way Germany will ever get their money back on this because we all know Germany is a relatively high tax country so any „profit” will disappear through transfer pricing mechanisms and appear back in the US or other lower tax environment.

And to think the German gvt has allowed the US to fine its own companies billions, eg Siemens, VW etc. and now hand over more. It’s like there are members of the German govt and ministries that are working for the US and not for their own people.
Posted on Reply
#8
Vayra86
lemonadesodaThere’s no way Germany will ever get their money back on this because we all know Germany is a relatively high tax country so any „profit” will disappear through transfer pricing mechanisms and appear back in the US or other lower tax environment.

And to think the German gvt has allowed the US to fine its own companies billions, eg Siemens, VW etc. and now hand over more. It’s like there are members of the German govt and ministries that are working for the US and not for their own people.
Germany doesnt care about money and neither does the EU. We are looking at strategic moves here, with geopolitical context.
Posted on Reply
#9
Darmok N Jalad
HockzWhat happened with this?
www.techpowerup.com/309924/germany-turns-down-intels-request-for-more-fab-fund-subsidies
Perhaps the desire to be self sufficient in this area overruled the money proposition. If we're banning drones, routers, and smartphones from certain Chinese manufacturers, maybe there's a lack of trust in other nations to produce chips, even if it's from Intel. I don't pretend to know if it's even possible that someone could slip something malicious into one of Intel's designs, but even if that's not a concern, having your supply dry up due to an economic Cold War is a very real concern. It may not be about profitability at all, but security. Intel probably knew this, and used it to their advantage. We see it with sports teams all the time--"build us a new stadium or we'll move the team."
Posted on Reply
#10
THANATOS
Vayra86Germany doesnt care about money and neither does the EU. We are looking at strategic moves here, with geopolitical context.
Paying billions from German or European taxpayer's money to Intel to make their CPUs in Germany is not a strategic move.
A strategic move would be If EU started making CPUs, GPUs, Memory, HDD, SSD, monitors in our own fabs designed by our own companies.
We are highly dependent on a few other countries for such products, and that's a huge disadvantage for the EU.
Posted on Reply
#11
eidairaman1
The Exiled Airman
lemonadesodaWhy state subsidies to an extremely profitable company? Small companies and individuals have to fund this through higher average taxes 'cos money don't grow on trees.
Corruption
Posted on Reply
#12
Suspenders
THANATOSPaying billions from German or European taxpayer's money to Intel to make their CPUs in Germany is not a strategic move.
A strategic move would be If EU started making CPUs, GPUs, Memory, HDD, SSD, monitors in our own fabs designed by our own companies.
We are highly dependent on a few other countries for such products, and that's a huge disadvantage for the EU.
This right here. This will be spun as being a "strategic move for Europe" but it really isn't because ultimately the US has the final say on who Intel is allowed to sell products to (and by extension, anything that they make at these new German fabs). Europe will just be along for the ride (and paying for it to boot!).

Good on Intel I guess; if nothing else Gelsinger has certainly stepped up their begging game :roll:
Posted on Reply
#13
Vayra86
SuspendersThis right here. This will be spun as being a "strategic move for Europe" but it really isn't because ultimately the US has the final say on who Intel is allowed to sell products to (and by extension, anything that they make at these new German fabs). Europe will just be along for the ride (and paying for it to boot!).

Good on Intel I guess; if nothing else Gelsinger has certainly stepped up their begging game :roll:
As long as cultural and (geo)political interests align, the EU and US are moving together. We've seen this with Ukraine. We've seen it in history more often than not. We also have disagreements, and its entirely up to the EU to put more weight in that area, which, albeit slowly, is happening. I know its far from ideal, but what alliance on this planet really is?
Posted on Reply
#14
Selaya
the mob strikes again.
Posted on Reply
#15
lemonadesoda
Vayra86As long as cultural and (geo)political interests align, the EU and US are moving together.
Only that the US is much smarter than the EU. If you look over the last 80 years, payments have usually gone in one direction only. EU to US. Whether this is, as in this case, subsidies, it is usually fines and financial rip offs. E.g. Exxon oil spill that bankrupted many re-insurance syndicates in the UK (Lloyds), Junk bonds, CDOs, Shell oil in Gulf of Mexico, Dieselgate etc. There is always a new flow of funds Stateside. It just shows that geopolitically, and geoeconomically, the US is much smarter than the EU.
Posted on Reply
#16
Vayra86
lemonadesodaOnly that the US is much smarter than the EU. If you look over the last 80 years, payments have usually gone in one direction only. EU to US. Whether this is, as in this case, subsidies, it is usually fines and financial rip offs. E.g. Exxon oil spill that bankrupted many re-insurance syndicates in the UK (Lloyds), Junk bonds, CDOs, Shell oil in Gulf of Mexico, Dieselgate etc. There is always a new flow of funds Stateside. It just shows that geopolitically, and geoeconomically, the US is much smarter than the EU.
Yeah, clearly, and it certainly has something to do with how young the Union is. We're also seeing change.
Posted on Reply
#17
Scrizz
lemonadesodaOnly that the US is much smarter than the EU. If you look over the last 80 years, payments have usually gone in one direction only. EU to US. Whether this is, as in this case, subsidies, it is usually fines and financial rip offs. E.g. Exxon oil spill that bankrupted many re-insurance syndicates in the UK (Lloyds), Junk bonds, CDOs, Shell oil in Gulf of Mexico, Dieselgate etc. There is always a new flow of funds Stateside. It just shows that geopolitically, and geoeconomically, the US is much smarter than the EU.
What about all the stuff with Amazon, Facebook, Microsoft, etc?
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