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Intel: Is the dream of a chip factory in Magdeburg shattered?

2023-02-23T14:56:28.292Z


The construction of Intel's chip factory in Magdeburg has been delayed: Intel boss Pat Gelsinger is playing poker for further subsidies worth billions from German taxpayers. Federal Finance Minister Lindner reacts touched. The state cannot be blackmailed.


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Give me the tax money: Intel boss

Pat Gelsinger

Photo: JONATHAN ERNST / REUTERS

The statement could not have been clearer - and should cause unrest in Magdeburg.

"Without clearer commitments from customers, I will not put several billion dollars in equipment for chip factories," said Intel boss

Pat Gelsinger

(61) on Wednesday.

In other words, management believes the business outlook is uncertain and is therefore questioning its multi-billion dollar growth plans and investments.

Intel wanted to have started building the announced chip factory in Magdeburg long ago.

Intel board member

Keyvan Esfarjani

recently assured that the plot of land had been bought and paid for and announced the start of construction for 2024.

Then - "maybe" - the group wants to start building the factory, which the city and Saxony-Anhalt are eagerly hoping for.

The factory should create thousands of jobs and could, so it is hoped, lead to further investments in the structurally weak region.

But what Esfajani also made clear: Given the uncertain demand, the financial support from the federal government is "a key factor" for Intel.

Want to say: Intel continues to haggle behind the scenes for more subsidies.

Now the group is even supposed to demand ten billion euros in subsidies from the state instead of the originally agreed 6.8 billion euros.

Federal Finance Minister

Christian Lindner

(44) then stated that the federal government was examining the matter.

At the same time, the minister emphasized that the state cannot be blackmailed.

Reint Gropp

(56), President of the Leibniz Institute for Economic Research in Halle (IWH), sharply criticized the demand by corporations such as Intel and Infineon for more state support for the construction of factories.

"We're throwing money out the window," he warned.

Subsidies of one million euros for every job that Infineon, for example, wants to create with its planned factory in Dresden are simply too much.

"Why should one still give money to such profitable companies? No gifts may be distributed," criticized the scientist.

Intel wants to save three billion dollars in the current year

Intel, unsurprisingly, sees things differently.

The Intel boss expects a loss for the current first quarter and announced not only a lower dividend due to the worsening economic environment, but also an austerity course and salary cuts.

The group wants to save three billion dollars this year alone.

He himself will also forego 25 percent of his salary in the current year.

As a reminder: In 2021, the CEO earned around $ 180 million in salary.

Against this background, the question arises as to when and whether the factory in Magdeburg can be realized at all.

Sure: The new factory building, estimated by Intel to cost a total of 17 billion euros, could create a few thousand jobs in the construction industry - at least for the construction phase, as Intel claims.

For the factory itself, Intel expects 3,000 permanent jobs.

Intel advertises in the most beautiful colors that thousands more jobs could also be created with suppliers and partners.

However, it is uncertain whether a single Lindner factory will be worth ten billion euros in tax money.

Because Intel isn't the only one holding out, it's just a player haggling over subsidies.

Tesla announced this week that it would scale back its battery plans for the already built Gigafactory in Grünheide.

Originally, Tesla boss Elon Musk had announced that Grünheide, the largest battery factory in the world, was to be built near Berlin.

Now Tesla wants to relocate important steps in battery production to the USA - because of the tax advantages.

rei with news agencies

Source: spiegel

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