Tuesday, November 5th 2024
Intel Magdeburg Factory Postponed to 2029/2030, Billions in State Subsidies Could Get Redistributed
Intel's ambitious fab expansion plans, which are currently facing a temporary halt, are of significant importance. The German government, as reported by HardwareLuxx, is now considering redirecting €10 billion from the Climate and Transformation Fund (KTF) initially allocated to Intel, potentially returning these subsidies to the federal budget. The pause on Intel's investment to 2029-2030 (according to Tom's Hardware) not only threatens Germany's hopes of becoming one of semiconductor industry leaders but has also sparked debate over the intended use of this substantial financial support. Given the rise of geopolitical tensions, the urgency and significance of the German semiconductor industry in the current economic landscape cannot be overstated. The potential negative impact of the halt on Intel's investment is a cause for concern and engagement.
Finance Minister Christian Lindner has proposed that the funds be reallocated to address other economic needs, emphasizing fiscal responsibility amid current challenges. In contrast, Economic Affairs Minister Robert Habeck, whose department manages the KTF, opposes this reallocation, arguing that the fund should continue to support long-term economic growth and environmental initiatives. This disagreement between Lindner and Habeck illustrates the competing priorities within the government over the best use of public funds in uncertain economic times. The urgency of resolving this impasse is clear, as it will require navigating these tricky political waters while weighing the strategic importance of securing significant semiconductor investments in Germany. If Intel continues its Magdeburg expansion by the end of this decade, the terms for state subsidies might be changed. However, that is something to worry about in the distant future, as the blue giant has the priority of getting its financials back in line first.
Sources:
HardwareLuxx.de, via Tom's Hardware
Finance Minister Christian Lindner has proposed that the funds be reallocated to address other economic needs, emphasizing fiscal responsibility amid current challenges. In contrast, Economic Affairs Minister Robert Habeck, whose department manages the KTF, opposes this reallocation, arguing that the fund should continue to support long-term economic growth and environmental initiatives. This disagreement between Lindner and Habeck illustrates the competing priorities within the government over the best use of public funds in uncertain economic times. The urgency of resolving this impasse is clear, as it will require navigating these tricky political waters while weighing the strategic importance of securing significant semiconductor investments in Germany. If Intel continues its Magdeburg expansion by the end of this decade, the terms for state subsidies might be changed. However, that is something to worry about in the distant future, as the blue giant has the priority of getting its financials back in line first.
25 Comments on Intel Magdeburg Factory Postponed to 2029/2030, Billions in State Subsidies Could Get Redistributed
Step 2: Intel is bought by another company
Step 3: Intel executives golden parachute out of our lives for good (I'd rather throw them an anvil but I'm a realist)
But if one company deserves it, is intel. Sadly, looks like MS and Qualcomm has escaped her wrath.
Meanwhile...
Without the fabs, Intel is just a company without super competitive hardware. The prices of everything they make would go up if they had to rely on third parties for everything, and TSMC frankly doesnt have the space.
Kinda like Ryan cohen, who wanted to split by by baby off of bed bath and beyond, since it actually made money, only to realize without BBBY's distribution network BBB was unprofitable. It's a Rome situation. Intel is pointless without their fabs but can only profit if their fabs are making competitive stuff. If they ditch the fabs, their worth goes in the tank, and shareholders would never let that happen.Well,t hey pulled out of the US deals in part because CHIPS was never paid out. They're grants, not reimbursements.
they could have coasted on for a decade like they were before the insane expansion
With the current US election results I hope the above penny drops, and rapidly too.The ++++++ even, best gif 2024
After N12, TSMC has done N10, N7, N5, N3 and is working on N2, each new node being more complicated and expensive than the one before. TSMC is currently spending something like 5-6 billion a year in R&D and these incremental node updates come over long years. N10 was mass manufacturing in 2016 meaning there had been a couple years of investment before that in getting it working. Intel is spending at least the same if not more in manufacturing R&D.
Short version - of course countries or blocks in case of EU can and should invest in their own companies. But if that means effectively tens of billions euros spent on R&D plus construction and scaling costs on top of that, it becomes a very touchy topic.
I mean, sure, independence means in-house everything. But atm Infineon can only count as plan B, something for the medium and long term. Even if you start with Intel, it will still be European engineers that will work there. And that's knowledge coming in.
But I guess that is the upside of China kicking us in our Taiwan nuts: we have to wake up and do something.