Chip Shortage Relief: Intel Plans to Spend $19 Billion on New German Factory

Santa Clara, USA - March 26, 2012: Intel headquarters in silicon vallye.
maybefalse / Getty Images

Amid a global chip shortage that many have referred to as “chipaggedon,” Intel announced the first phase of its plans to invest $88 billion (€80 billion) in the European Union over the next decade along the entire semiconductor value chain — from research and development to manufacturing to state-of-the-art packaging technologies — to address “the need for a more balanced and resilient supply chain,” according to a press release.

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The company said that this will include $18.7 billion (€17billion) into a  semiconductor fab mega-site in Germany, to create a new R&D and design hub in France, and to invest in R&D, manufacturing and foundry services in Ireland, Italy, Poland and Spain.

“Our planned investments are a major step both for Intel and for Europe,” Pat Gelsinger, CEO of Intel, said in the release. “The EU Chips Act will empower private companies and governments to work together to drastically advance Europe’s position in the semiconductor sector. This broad initiative will boost Europe’s R&D innovation and bring leading-edge manufacturing to the region for the benefit of our customers and partners around the world. We are committed to playing an essential role in shaping Europe’s digital future for decades to come.”

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In the initial phase, Intel plans to develop two semiconductor fabs in Magdeburg, Germany, with construction expected to begin in the first half of 2023 and production planned to come online in 2027, pending European Commission approval, reads the report.

The company said that Germany is an ideal place to establish a new hub that it calls  “Silicon Junction,” for advanced chipmaking and that it plans to create 7,000 construction jobs over the course of the build, 3,000 permanent high-tech jobs at Intel, and tens of thousands of additional jobs across suppliers and partners.

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In January, Intel announced it would invest more than $20 billion in the construction of two new chip factories near Columbus, Ohio. To support the development of the new site, Intel pledged an additional $100 million toward partnerships with educational institutions to build a pipeline of talent and bolster research programs in the region, the company said in a statement at the time, as GOBankingRates previously reported.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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