Intel’s German Fab Construction Stalled by Subsidy Delays & Soil Issues

Last June, Intel reached an agreement with the German federal government, with both parties announcing the signing of a revised letter of intent to invest over €30 billion in the construction of new wafer fabs in Magdeburg. The initial phase includes two wafer fabs, Fab 29.1 and Fab 29.2. Intel’s construction progress has been fraught with challenges, including the discovery of two approximately 6,000-year-old tombs on the site two months ago, raising concerns that archaeological work might delay the project.

According to Volksstimme, the construction of Intel’s Fab 29.1 and Fab 29.2 has indeed been postponed due to two main issues: First, the subsidies promised by the EU and the German government have not been disbursed, with the €10 billion subsidy still awaiting approval and further review; second, the soil conditions are unsuitable, necessitating extensive clearing work, which has significantly slowed the construction progress.

It has been reported that the chosen land surface has 40 cm of fertile black soil, which Intel initially planned to relocate for local farmland use. However, excavation revealed the black soil extends to a depth of 90 cm, requiring additional time for removal. Furthermore, Intel must comply with local environmental and construction regulations. The black soil clearance, originally scheduled for completion by the end of 2024, has now been delayed to May 2025, after which construction of the factory buildings can commence. Additionally, the local government is constructing a road to connect the plant area, expected to be completed by April 2025, which will enhance the efficiency of soil and construction material transportation.

Currently, the land acquisition process is ongoing, with most landowners willing to sell at €25 per square meter, significantly higher than the typical agricultural land price.