Intel Magdeburg Factory Postponed to 2029/2030, Billions in State Subsidies Could Get Redistributed

[AleksandarK]

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.



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[Daven]

Step 1: Intel gives back all government money worldwide

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)

 

[TumbleGeorge]

Step 1: Intel gives back all government money worldwide

Intel gives back all of these money...How?

 

[AleksandarK]

Step 1: Intel gives back all government money worldwide

Pat Gelsinger complained that they havent received a their CHIPS Act funds yet, soo there is nothing to return so far

 

[Daven]

Intel gives back all of these money...How?

That’s the premise of the article for the EU subsidies.

Pat Gelsinger complained that they havent received a their CHIPS Act funds yet, soo there is nothing to return so far

Whoops, nvm about US government monies.

 

[TheLostSwede]

That’s the premise of the article for the EU subsidies.

No money has been paid out as yet, only allocated and now it appears it will be reallocated.

 

[john_]

Netherlands (meaning ASML) is next to them and they have companies like Infineon. Why bother with Intel and not invest in their own hi tech companies?

 

[evernessince]

Pat Gelsinger complained that they havent received a their CHIPS Act funds yet, soo there is nothing to return so far

At this point, governments should want Intel to hold up their end of the bargain before providing public money. Intel has been pulling out of way too many deals lately.

 

[Dave65]

Does AMD get any of this money or is it just companies that have FABS?

 

[Neo_Morpheus]

Karma is such a beautiful and cruel dame.

But if one company deserves it, is intel. Sadly, looks like MS and Qualcomm has escaped her wrath.

Meanwhile...

 

[erocker]

Pat Gelsinger complained that they havent received a their CHIPS Act funds yet, soo there is nothing to return so far

Good! Intel is a failing company, it would just be money wasted.

 

[londiste]

Does AMD get any of this money or is it just companies that have FABS?

Fabs.

 

[Eternit]

Step 1: Intel gives back all government money worldwide

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)

I think between steps 1 and 2 intel should be split into two or more companies. It would be easier to find an investor to buy fabs only and another one to buy everything else.

 

[TheinsanegamerN]

I think between steps 1 and 2 intel should be split into two or more companies. It would be easier to find an investor to buy fabs only and another one to buy everything else.

The fabs are what make intel so valuable. The only other thing of worth is the x86 license, and whomever bought Intel would have to grapple with AMD, who own the 64 bit extension. Intel and AMD license them from each other in perpetuity.

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.

At this point, governments should want Intel to hold up their end of the bargain before providing public money. Intel has been pulling out of way too many deals lately.

Well,t hey pulled out of the US deals in part because CHIPS was never paid out. They're grants, not reimbursements.

 

[kondamin]

Well,t hey pulled out of the US deals in part because CHIPS was never paid out. They're grants, not reimbursements.

exactly, they wouldn’t have gotten them selves in his mess if it wasn’t for the promises of free money.

they could have coasted on for a decade like they were before the insane expansion

 

[Vayra86]

Netherlands (meaning ASML) is next to them and they have companies like Infineon. Why bother with Intel and not invest in their own hi tech companies?

Yeah... thanks but you're being way too logical here, can't be doing that now, we might just gain some strategic independence here in the EU, thats scary AF!

With the current US election results I hope the above penny drops, and rapidly too.

Karma is such a beautiful and cruel dame.

But if one company deserves it, is intel. Sadly, looks like MS and Qualcomm has escaped her wrath.

Meanwhile...

The ++++++ even, best gif 2024

 

[mffunmf]

Netherlands (meaning ASML) is next to them and they have companies like Infineon. Why bother with Intel and not invest in their own hi tech companies?

Does Infineon want to produce chips? If Germany wants a chip producer, either it needs to give money to Infineon, hoping that it will be to produce chips in the future, or it needs to give money to Inter/TSMC because they can produce chips for sure. But if Germany wants to just invest and doesn't care to what, then sure, it can just invest in Infineon. You invest in those who you need, and you put up the terms of your investment.

 

[bug]

Netherlands (meaning ASML) is next to them and they have companies like Infineon. Why bother with Intel and not invest in their own hi tech companies?

Infineon is somewhat akin to TSMC, ASML builds the tools TSMC or Infineon use. Neither is in the business of actually designing chips. If the goal is just to have independent manufacturing, I guess Infineon could fit the bill, only they're too small compared to Intel. They would need way more $$$ to scale. Too complicated atm.

 

[john_]

Infineon is somewhat akin to TSMC, ASML builds the tools TSMC or Infineon use. Neither is in the business of actually designing chips. If the goal is just to have independent manufacturing, I guess Infineon could fit the bill, only they're too small compared to Intel. They would need way more $$$ to scale. Too complicated atm.

You have to start somewhere and USA will never be a complete friend to Europe( meaning: You want liquid gas Europe? Because someone blown some underwater gas pipes? We have to sell you..... at 4 times the price. Oh! poor Germany your economy and industry is in trouble? I wonder why!) . They will be a good friend as long as Europe's economy is not a threat to USA. But in any case, you have to start somewhere. Russia is a joke in manufacturing not able to build anything. They take everything they need from China, but they have a goal to start producing even 28nm in 2027, meaning by let's say 2030, even Russia will be more independent than Europe in chip manufacturing.

 

[londiste]

Netherlands (meaning ASML) is next to them and they have companies like Infineon. Why bother with Intel and not invest in their own hi tech companies?

Infineon planned a year ago or so to do a joint venture with TSMC and others to basically get access to manufacturing TSMC-s N12.
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.

 

[OkieDan]

Russia is a joke in manufacturing not able to build anything. They take everything they need from China, but they have a goal to start producing even 28nm in 2027, meaning by let's say 2030, even Russia will be more independent than Europe in chip manufacturing.

A two week goal to take Keiv has exceeded 2.5 years, you're being far too generous.

 

[john_]

Infineon planned a year ago or so to do a joint venture with TSMC and others to basically get access to manufacturing TSMC-s N12.
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.

The whole EU can support manufacturing of microchips. There is no need to get at the top of the current technology. You just start at an easy node, like 28nm(I believe today this is an easy node), then slowly you get at more advanced nodes. If there is money to be made you advance faster, if not you advance at a pace that can warranty you some kind of independence from others, either China or the USA. 12nm is enough, as we have seen, for multi core CPUs at the Threadripper level and probably for myriad other applications. What EU needs is independence in a future where everything will have a microchip in it.

A two week goal to take Keiv has exceeded 2.5 years, you're being far too generous.

I was talking about chip manufacturing.

 

[bug]

The whole EU can support manufacturing of microchips. There is no need to get at the top of the current technology. You just start at an easy node, like 28nm(I believe today this is an easy node), then slowly you get at more advanced nodes. If there is money to be made you advance faster, if not you advance at a pace that can warranty you some kind of independence from others, either China or the USA. 12nm is enough, as we have seen, for multi core CPUs at the Threadripper level and probably for myriad other applications. What EU needs is independence in a future where everything will have a microchip in it.

It's not that simple. Scaling is not a given. TSMC stumbled on the 28nm node. Intel stumbled on 10nm. Samsung seems to (mini)stumble on everything. And those are the big players with tons of expertise.

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.

 

[kapone32]

If anyone remembers a little Company called IBM was in this same position about 40 years ago. Like Intel (funnily enough) they got too comfortable in a leadership position. Does anyone else remember that 10 core monster that used to be in every single issue of CPU magazine? That was a cool $999. Karma has a lot to do with it too as they should pay their fines. As now you can get 12 cores for less than 1/2 of that but Intel are still on 8 cores. They have not innovated enough in a space where not just AMD but others are carving out niche markets for their products. Those products happen to be CPUs and their derivatives like APUs, X3D, Epyc, Qulacomm chips and,Apple chips. The latest reviews are very damaging for their image as well.

 

[john_]

It's not that simple. Scaling is not a given. TSMC stumbled on the 28nm node. Intel stumbled on 10nm. Samsung seems to (mini)stumble on everything. And those are the big players with tons of expertise.

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.

28nm is considered old by now and probably all possible problems that can occur in the manufacturing process, solved. Intel seems to be unwilling or unable to invest in EU, I am pretty sure that TSMC wouldn't be interested either, I am pretty sure also that others will convince them to not expand to EU, China isn't an option because EU countries fear to go against US, so the only option, other than pay and beg, is to start an EU program about chip manufacturing. European Engineers can be found probably in the GlobalFoundries' factory in Dresden.