Intel’s new fab has received a lot of government subsidies
Recently, Intel announced its European semiconductor plan. Intel will invest 33 billion euros in the first phase, of which 17 billion euros will be used for the project in Magdeburg, Germany, to build two new fabs, which are expected to start construction in the first half of 2023 and are scheduled to start production in 2027. At the beginning of this year, Intel also announced an investment of more than $20 billion to build two new fabs in Ohio, USA, and the first fab will be put into production in 2025.
When Intel announced its IDM 2.0 strategy last year, it had already confirmed that it would build competitive semiconductor facilities in the U.S. and Europe, but that would require substantial government subsidies. According to dispatch reports, the Ohio state government has provided various incentives of about $2.1 billion, and Intel will also receive some subsidies through the CHIPS Act in the future.
But compared to the latest German Magdeburg fab project, the Ohio fab project is a bit insignificant. Bloomberg quoted officials familiar with the conversation, saying that Intel received $5.5 billion in state aid for the fab project in Magdeburg, Germany, accounting for about 29.4% of the project cost. Last year, Intel CEO Pat Gelsinger visited Europe and conducted a series of inspections to discuss the possibility of building a new fab in the European continent with relevant EU political and business people. Intel CEO has said that government subsidies are crucial to the revival of European semiconductor manufacturing.
According to Intel’s European semiconductor plan, new packaging and the testing plant will be built in Italy next, with an investment of about 4.5 billion euros. Earlier reports said that the Italian government plans to set up a 4 billion euro chip manufacturing fund to attract foreign semiconductor companies to set up factories in its territory. It is believed that if Intel invests in the construction of packaging and testing plants in Italy, it will also receive a considerable proportion of government subsidies.
