Intel delays construction of its semiconductor plants in eastern Germany by two years as part of cost-cutting plans. German Chancellor Olaf Scholz confirms the commitment to the project.
Bollywoodfever: German Chancellor Olaf Scholz confirmed on Tuesday that Intel remains committed to building semiconductor plants in eastern Germany, despite the U.S. chipmaker delaying construction by two years.
Intel’s decision is part of broader cost-cutting measures, but Scholz emphasized that the project is still moving forward.
“The decision to postpone the project in Germany for two years is a decision that also includes the intention to stick with it,” Scholz said during a visit to Astana.
He highlighted the importance of expanding Germany’s semiconductor industry amid volatile market conditions, stressing that the project will help secure the country’s place in the global chip market.
Intel’s CEO, Pat Gelsinger, released a memo earlier this week outlining the company’s plans, which include pausing construction at the Magdeburg plant for two years.
This delay is part of Intel’s efforts to revive its business, but Germany remains committed to boosting its semiconductor production as part of a broader European initiative.
German Economy Minister Robert Habeck echoed Scholz’s sentiments, stating that the decision was based on Intel’s corporate policy. “It’s now up to Intel to quickly get back on a path that enables investment,” Habeck added.
The delay sparked a budget dispute within Germany’s ruling coalition, with the finance ministry suggesting that funds originally earmarked for Intel subsidies should be redirected to balance the budget, while the economy ministry pushed back. Scholz confirmed that the government would discuss how to best use the unused funds.
Economists have weighed in, with Moritz Schularick of the IfW economic institute suggesting the funds be used for investment incentives, and Friedrich Heinemann of ZEW advocating for a tax reform that benefits all companies, not just those currently in the spotlight.
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