Intel Seeks Additional $5B German Subsidy for Chip Plant
Intel Corp (NASDAQ: INTC) is seeking an additional €4 billion - €5 billion in subsidies from the German government to proceed with a chip manufacturing complex in the eastern part of the country.
Intel had already reached a deal to build a plant in Magdeburg with €6.8 billion ($7.2 billion) in government subsidies, Bloomberg reports citing familiar sources.
But Intel postponed the construction at the end of 2022 due to economic headwinds.
"Disruptions in the global economy have resulted in increased costs, from construction materials to energy," Intel said in a statement. "We appreciate the constructive dialogue with the federal government to address the cost gap that exists with building in other locations and make this project globally competitive."
Intel's Germany project is facing delays just as the U.S. pressures other nations to help keep China's chipmaking abilities from advancing.
Intel competes with rivals, including Taiwan Semiconductor Manufacturing Company Ltd (NYSE: TSM) and Samsung Electronics Co, Ltd (OTC: SSNLF).
Intel announced an expansion across Europe last year that, at the time, was worth €33 billion, including a research center in France and an increase of its existing chip facility in Ireland.
Intel had initially estimated that the project in Germany would cost €17 billion but now expects to spend €30 billion.
Intel was expecting a subsidy of roughly 40% of its project.
While Intel was expecting government funds, it is also open to other sources of government aid, including tax breaks or energy subsidies.
Intel's expansions in Ireland and France remain mainly on track.
Price Action: INTC shares traded higher by 0.12% at $25.56 premarket on the last check Wednesday.
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