When completed later this decade, Intel's fab in Germany will be one of the most advanced semiconductor facilities in the world. "We appreciate the constructive dialogue with the federal government to address the cost gap with building in other locations and make this project globally competitive."
"Disruptions in the global economy have resulted in increased costs, from construction materials to energy," a statement by Intel reads. Intel confirmed that it was re-negotiating the support package with the German authorities because of increased fab costs, but they did not confirm the exact sums it sought. According to a Bloomberg report last week, it would need $4.223 billion – $5.279 billion (€4 billion – €5 billion) more state support. But because of high inflation, increasing costs of materials, and high energy prices, the company now believes that the initial investment would be around $31.675 billion (€30 billion). When Intel announced plans to establish a new manufacturing site near Magdeburg, Germany, last year, it said that its first production fab and supporting facilities would require investments of $18.7 billion (€17 billion) and negotiated $7.2 billion of state aid. But spiraled inflation, caused by the disruption of supply chains by the pandemic and then by the Russian war against Ukraine, increased costs of fabs for Intel and Samsung by billions of dollars, according to reports. To address future demand for semiconductors amid severe chip shortages of 2020 – 2022, all leading chipmakers announced plans to build new fabs and even disclosed their estimated costs.
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