Intel in Magdeburg: Federal government rejects higher subsidies

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Planned chip factory in Magdeburg (graphic): Is the major project faltering?

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The major project by the US chip company Intel in Magdeburg has been hit hard: the Federal Ministry of Economics has initially rejected calls for further subsidies for the construction of the factory.

One is currently negotiating with the company "about the concrete form of any funding," says an answer to a question from the Leipzig MP Sören Pellmann, which is available to SPIEGEL.

The ministry is therefore “not expecting an increase in the funding framework”.

This should be bad news for Saxony-Anhalt and eastern Germany.

Because last year there was great hope that the multi-billion dollar settlement could bring about a massive boom in the entire region.

Recently, however, concerns had arisen that the project could be significantly smaller, delayed or even fail: Intel originally wanted to invest the equivalent of 17 billion euros, but now almost 24 billion euros would be necessary, as Magdeburger's "Volksstimme" reported in December – partly because of inflation and higher energy costs.

Thousands of jobs are to be created

The Ministry of Economics, then still under the leadership of Peter Altmaier (CDU), had promised Intel financial support for the construction of the semiconductor factory in October 2021.

Originally it was about 6.8 billion euros – in the event that the European Commission agrees.

This state aid approval is still not available, the ministry has now announced.

The state government of Prime Minister Reiner Haseloff (CDU) had euphorically welcomed the major project - and recently tried to support it with the help of a controversial regulation: Finance Minister Michael Richter (CDU) presented a draft law, according to which additional expenditure "to realize settlements with state-politically outstanding Significance« approved by the finance committee and could thus be approved by the state parliament.

Criticism of this “Lex Intel” also arose within the CDU, and the state audit office described the regulation as unconstitutional.

Intel announced last year that it would initially set up two semiconductor production facilities in the south-west of Magdeburg by 2027.

The "mega-fab" on an area of ​​450 hectares is intended to create at least 3,000 high-tech jobs in the long term, and according to Intel there will probably be tens of thousands more jobs, for example with suppliers and partners.

The first groundbreaking was originally supposed to take place in the coming months, but that's also unclear in the meantime: Intel doesn't want to set a date for the start of construction.

The preparatory work on the site on the outskirts of Magdeburg, which has already been sold to Intel, has nevertheless begun: the first excavators have rolled out for the necessary archaeological investigations.

mxw