Intel: New chip factory in Magdeburg to be completed in 2027

The EU subsidies are having an effect: Intel wants to build a huge chip factory in Saxony-Anhalt. Semiconductors are to be manufactured in Magdeburg in the future.

The "EU Chips Act" is intended to attract industrial settlements in the semiconductor industry. Now the market leader in desktop processors is said to have heard the reputation and opted for a chip factory in Magdeburg. 

In a virtual press conference with CEO Pat Gelsinger, Intel announced that it will begin construction of a chip factory in Magdeburg in 2023. Intel has thus given preference to the state capital of Saxony-Anhalt over other European locations. Production is scheduled to begin at the end of 2027.

"In the first phase, we plan to invest 17 billion euros in the construction of two brand new, unique semiconductor factories in Magdeburg," Intel CEO Pat Gelsinger said in a video stream. Up to six more factories are planned for the coming years. 

All new European sites are to be supplied with renewable energy. Intel had announced last year the construction of a major European factory. The EU Commission has set up a 45 billion euro pot for the promotion of the chip industry. With its help, the European Union is to achieve a global market share of 20 percent by 2030.

Dresden outdone

In addition to locations in France and Italy, Dresden was also under discussion. The head of the local Fraunhofer Institute for Photonic Microsystems, Hubert Lakner, had campaigned for this. Lakner had argued that Dresden already had the necessary ecosystem for the megafactory. "Magdeburg can't afford that," he was sure. The small Bavarian town of Penzing was also among the applicants.

The plant, which is to be built for a double-digit billion amount, is now planned in the Eulenberg industrial area, observers write. The 300-hectare "fillet piece" (PDF) offers excellent settlement and connection conditions, according to the country's marketing and investment company. It is located just off the A14. The local university for IT specialists is also said to have been an argument for the decision.

2 Factories in Europe to be financed with EU money

Intel is planning a total of two factories in the EU. However, the basic prerequisite is the subsidy from the EU funding pot, according to the group. Intel generated $73 billion in revenue last year and has a global market share of 12.5 percent. 

The production facility in Magdeburg is expected to create 1,000 jobs and help meet the increased demand for chips and semiconductors – especially in the automotive industry. Observers expect even more new jobs in the vicinity of the factory.