Germany to Give Intel €6.8 Billion Towards Magdeburg Fab

[TheLostSwede]

German media is reporting that Intel will be receiving some €6.8 billion in subsidies for its planned Magdeburg fab. Some €2.7 billion has already been set aside for the 2022 federal government budget and the remaining money will be allocated in the 2023 and 2024 budgets. The Magdeburg member of the Bundestag, Martin Kröber, who announced the budget allocation to the local media, said that Intel's establishment in Magdeburg should be a boost for the entire Saxony-Anhalt area.

Intel's total investment in Magdeburg has a budget in excess of €33 billion, which means that the German government is pitching around a fifth of the total investment. That said, the first fab will only end up somewhere around the €17 billion mark, with space for a further two fabs on the location Intel has selected. Production at the new fab is estimated to begin sometime in 2027. In related news, TSMC is said to have decided on skipping Europe for the time being, largely due to lack of local customers, according to Reuters.



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[Daven]

I’m definitely against this. No government should be giving (whether through subsidies or other means) money to ANY company to build ‘regular’ company infrastructure. Its anti competitive and anti fair trade.

Countries can fund R&D through their national lab and university system and license discoveries to private industries but they shouldn’t be funding the building of their ‘regular’ stores, office buildings, R&D facilities and factories.

A few exceptions could be made for ‘public’ manufacturing that offers services to multiple entities without favoritism and even that is a slippery slope.

 

[FreedomEclipse]

I’m definitely against this. No government should be giving (whether through subsidies or other means) money to ANY company to build ‘regular’ company infrastructure. Its anti competitive and anti fair trade.

Doesnt governments offering tax rebates and tax credits to businesses to set up shop in their part of town also fall under this?

A lot of game publishers do this as well. Governments will give them tax rebates. But these publishers can also apply for government grants or tax benefits based on the amount of staff they have working at said business - CEOs and executive's pocket most of what the government gives them and pays their staff the smallest amount they can get away with out of the scheme.

 

[Guwapo77]

I’m definitely against this. No government should be giving (whether through subsidies or other means) money to ANY company to build ‘regular’ company infrastructure. Its anti competitive and anti fair trade.

Countries can fund R&D through their national lab and university system and license discoveries to private industries but they shouldn’t be funding the building of their ‘regular’ stores, office buildings, R&D facilities and factories.

A few exceptions could be made for ‘public’ manufacturing that offers services to multiple entities without favoritism and even that is a slippery slope.

I use to think this way, but then I looked at it through the lens of the billions of dollars that will be brought to the German (local) economy. Much like a military base being partially funded by a government, the billions of dollars that are generated is nothing compared to the initial investment. Then you will have restaurants, hotels, homes, and etc. that will spring up around these businesses.

 

[phanbuey]

not to mention TSMC got to where it is with heavy subsidies and govt support. We should be also pumping Global Foundries, not just intel.

 

[Space Lynx]

not to mention TSMC got to where it is with heavy subsidies and govt support. We should be also pumping Global Foundries, not just intel.

I agree with this. Getting TSMC to build in the west should be incentivized, Intel/GLobal Foundaries should also be incentivized. We waste a trillion ever year on a healthcare system that doesn't work at all, and a another 750 billion on a military that is eh at best, not enough RnD spending otherwise I might be ok with it...

so another ten billion here and there to help national security chip production... pennies in the pool really.

 

[The King]

Fair Trade? Fair Competition? Not sure if we live on the same planet.

Intel would not be Intel if they followed those principles. They much rather pay the pocket change fines than play by puny government laws. Same goes for FB/Meta or Google, Apple etc

Let's not flame but you know its all true!

 

[Deleted member 24505]

It's partly about local jobs, which there will be some, plus other infrastructure in the area. Also they are only giving 1/5 of the total cost, so Intel must be investing much more than that in the area, so what is the problem.

People just hate Intel with a passion don't they.

If this was a AMD plant i bet there would not be half as much whining

I use to think this way, but then I looked at it through the lens of the billions of dollars that will be brought to the German (local) economy. Much like a military base being partially funded by a government, the billions of dollars that are generated is nothing compared to the initial investment. Then you will have restaurants, hotels, homes, and etc. that will spring up around these businesses.

Wow the only sane person in this thread. Well done.

 

[maxfly]

Funny that some of you act surprised. This is simply how big business is done. Its nothing new. Ford, GM and Chrysler (to name some off the top of my head)have been playing this game for as long as I can remember(20-30yrs, probably much longer). Cities, states and countries have been throwing money at big corporations with tax breaks, free land, subsidies etc as part of how they build their futures for as long as business has been done. Nothing new here. The dollar signs are simply a bit bigger(naturally).

 

[Dr. Dro]

I’m definitely against this. No government should be giving (whether through subsidies or other means) money to ANY company to build ‘regular’ company infrastructure. Its anti competitive and anti fair trade.

Countries can fund R&D through their national lab and university system and license discoveries to private industries but they shouldn’t be funding the building of their ‘regular’ stores, office buildings, R&D facilities and factories.

A few exceptions could be made for ‘public’ manufacturing that offers services to multiple entities without favoritism and even that is a slippery slope.

Then they'll just happily take their business elsewhere. Advanced semiconductor fabrication is something everyone wants. These incentives are tax breaks, practically, the government is not going to be disbursing any money, they're simply not taking their usual cut to incentivize the investment and bolster the local economy. This means local production and jobs. Semiconductors are also a key strategic interest to the West, as it's entirely reliant on the Taiwanese supply. This is bad for many reasons, can you imagine the disarray that we would find ourselves in if Taiwan's semiconductor industry were to be somehow blocked by a military campaign or major disaster?

 

[Denver]

I’m definitely against this. No government should be giving (whether through subsidies or other means) money to ANY company to build ‘regular’ company infrastructure. Its anti competitive and anti fair trade.

Countries can fund R&D through their national lab and university system and license discoveries to private industries but they shouldn’t be funding the building of their ‘regular’ stores, office buildings, R&D facilities and factories.

A few exceptions could be made for ‘public’ manufacturing that offers services to multiple entities without favoritism and even that is a slippery slope.

Can you apply a layer of reality to your train of thought? Do you really think that companies that manufacture complex processors protected by tons of patents can be achieved with investment in research now? Until they get something viable that doesn't violate one of the trillions of patents from current manufacturers, we'll already be using something much more efficient, and the money invested in research will end up in the trash.

 

[Bomby569]

I’m definitely against this. No government should be giving (whether through subsidies or other means) money to ANY company to build ‘regular’ company infrastructure. Its anti competitive and anti fair trade.

Countries can fund R&D through their national lab and university system and license discoveries to private industries but they shouldn’t be funding the building of their ‘regular’ stores, office buildings, R&D facilities and factories.

A few exceptions could be made for ‘public’ manufacturing that offers services to multiple entities without favoritism and even that is a slippery slope.

I's in the countries interest. In Europe we can't rely on manufacturing from China/Taiwan (obvious reasons), or even Korea (who the hell knows if the north does something stupid) or even the US (remember Trump)

 

[ARF]

I's in the countries interest. In Europe we can't rely on manufacturing from China/Taiwan (obvious reasons), or even Korea (who the hell knows if the north does something stupid) or even the US (remember Trump)

This sounds like - I don't want to be well, I want my neighbour to be bad

And yeah, the government investing in a particular foreign corporation's business is anti-competitive and the EU anti-trust should be called.

 

[Bomby569]

This sounds like - I don't want to be well, I want my neighbour to be bad

It's called being a realist. I didn't want Russia to invade, or China to be nuts, or the Americans to vote for idiots. I can't control that from Europe. What i want doesn't matter, neighbourly speaking

Neighbours do neighbours, you can't control them.

 

[ARF]

I didn't want Russia to invade

I don't think anyone asks you. You can't control the movements of an empire

 

[MarsM4N]

Well, some car manufacturers had to close for weeks or had to do part time because of chip shortages. Which is kinda bad for a economy heavily based on car sales.

Hope they also subsidize the pharma industry to get production of vital meds back in town. During the pandemic we were running dry for some meds, and that was "only" a pandemic. Would turn out very bad for some folks if you run out of insuline, blood pressure or cancer meds. Also production over there is not always as clean as it should be.

 

[Nanochip]

I’m definitely against this. No government should be giving (whether through subsidies or other means) money to ANY company to build ‘regular’ company infrastructure. Its anti competitive and anti fair trade.

Countries can fund R&D through their national lab and university system and license discoveries to private industries but they shouldn’t be funding the building of their ‘regular’ stores, office buildings, R&D facilities and factories.

A few exceptions could be made for ‘public’ manufacturing that offers services to multiple entities without favoritism and even that is a slippery slope.

If you use a device with a certain chip inside, like say snapdragon or apple a-series, then you’re likely using a chip built by TSMC. And idk if you’re aware, but the Taiwanese government has subsidized some of TSMC’s massive costs. So are you going to throw away your device that was built in part from (Taiwanese) government money?

If chips are essential to modern and future society, and Taiwan may come under attack, then governments worldwide have to have a vested interest in lowering their dependence on chips sourced from Taiwan. I have nothing against Taiwan, but if china seizes it, that could spell doom for many in the west. Nvidia, amd, apple, Qualcomm. Even intel, as some of its meteor lake tiles will be built on TSMC. Intel ARC is also built on TSMC. Not good. Also, intel will create jobs in the local economy, and that is good for Germany and for America. So it’s an investment into their future. Chip making is unique because of the extremely high capital costs involved. Most other industries don’t require an insane 10s of billions of dollars to start up a manufacturing plant.

 

[ARF]

So, the German government will buy intel shares for the cost of 6.8B euros and call it a day? Next step is to buy 100% of intel and call it a day

 

[Dr. Dro]

Well, some car manufacturers had to close for weeks or had to do part time because of chip shortages. Which is kinda bad for a economy heavily based on car sales.

Hope they also subsidize the pharma industry to get production of vital meds back in town. During the pandemic we were running dry for some meds, and that was "only" a pandemic. Would turn out very bad for some folks if you run out of insuline, blood pressure or cancer meds. Also production over there is not always as clean as it should be.

Even the pharmaceutical industry would need semiconductors to function, to mix and match substances in the precise amount required

Honestly there are much worse ways tax breaks are employed, and I feel most of the protest in the end comes down to... brand loyalty, again.

 

[ARF]

Even the pharmaceutical industry would need semiconductors to function

You can perfectly run that with 90nm or 45nm chips for basic systems.
And that means that intel is not needed because there are other companies that can manufacture such chips.

The nanometer race in semiconductors is only because of race for higher and more profits, not that the given industry needs it.

 

[Dr. Dro]

You can perfectly run that with 90nm or 45nm chips for basic systems.
And that means that intel is not needed because there are other companies that can manufacture such chips.

The nanometer race in semiconductors is only because of race for higher and more profits, not that the given industry needs it.

If it only were that simple. You think these industrial systems run on off the shelf computers? Or that they don't need specialty maintenance and spares to keep on functioning?

Come on, man!

 

[Daven]

So in response and as a addon to my comment. All corporations especially the big ones and the rich are constantly trying to pay less to no taxes in perpetuity.

The poor and middle class are paying for a lot more government programs. Often times the citizens at these income levels can barely take advantage of high education jobs created much less afford the products that fabs make.

Can at least some of you reasonably conclude that we need to collect a lot more money from rich corporations and rich individuals if they are gonna take government subsidies? And if you don’t want them paying more taxes and the jobs created dont help the bottom incomes, then you must conclude that they shouldn’t get government help.

What’s the point of strong domestic and secure production if only a rich few benefit? I really dont remember reading about millions and millions becoming high wage earners in China when the world’s production shifted to that country. In fact, I think all that production made China worse!

 

[noel_fs]

i really dont understand this thing about giving money to private companies


like one thing is giving an incentive but another thing is 7 billion lol

 

[ARF]

Questions:
- does the German government pour the same amounts of cash into GLOBALFOUNDRIES?
- did intel win a fair competition with other plants for this specific subsidy?
- is the EU informed and is it legal?

 

[maxfly]

You can perfectly run that with 90nm or 45nm chips for basic systems.
And that means that intel is not needed because there are other companies that can manufacture such chips.

The nanometer race in semiconductors is only because of race for higher and more profits, not that the given industry needs it.

If only that's how the world actually worked. We could look forward to static pricing for years and years to come.

So in response and as a addon to my comment. All corporations especially the big ones and the rich are constantly trying to pay less to no taxes in perpetuity.

The poor and middle class are paying for a lot more government programs. Often times the citizens at these income levels can barely take advantage of high education jobs created much less afford the products that fabs make.

Can at least some of you reasonably conclude that we need to collect a lot more money from rich corporations and rich individuals if they are gonna take government subsidies? And if you don’t want them paying more taxes and the jobs created dont help the bottom incomes, then you must conclude that they shouldn’t get government help.

What’s the point of strong domestic and secure production if only a rich few benefit? I really dont remember reading about millions and millions becoming high wage earners in China when the world’s production shifted to that country. In fact, I think all that production made China worse!

I don't think you understand what these subsidies actually entail. They may help Intel absorb a small portion of the cost to build their $30 to $50 billion dollar foundry and they may in fact work out some kind of sweetheart deal that exempts them from paying taxes for the first 5 or 10 years(I have no idea). What your missing is the massive influx of capital generated by their employing thousands of locals (poor and middle class)both directly and indirectly. Which will obviously generate huge amounts of tax revenue in and of itself. Not withstanding the actual taxes Intel will pay. Inevitably they will become one of the biggest companies in the country. The taxes will follow.

China is a world player because of their ability to look ahead and take advantage of the Wests insatiable appetite for cheap labor and goods. They've done quite well for themselves. Their economic and cultural systems are far more at the core of wealth distribution than anything else. As to the average citizens feelings of economic health today vs. prior to their economic boom? I doubt many modern citizens would complain. China was essentially a 3rd world country during the hardline years