Intel places development plans for chip manufacturing unit in Magdeburg on maintain | EUROtoday

The struggling chip firm Intel is placing the development of a manufacturing unit in Magdeburg on maintain. The undertaking will in all probability be delayed by two years, mentioned firm boss Pat Gelsinger. Intel is battling losses and has launched a cost-cutting program.

Intel had introduced the development of two chip factories in Saxony-Anhalt. The groundbreaking ceremony was deliberate for this 12 months. Around 3,000 jobs had been to be created. The funding was estimated at round 30 billion euros. Last 12 months, the federal authorities promised state support of 9.9 billion euros for the settlement.

Just a number of months in the past, Gelsinger mentioned that essentially the most fashionable manufacturing processes can be utilized in Magdeburg, with which Intel needs to meet up with its extra profitable rivals. Production was anticipated to start out in 2027 or 2028.

Finance Minister Christian Lindner has spoken out in favor of utilizing unused funds for the Intel chip manufacturing unit in Magdeburg for the federal finances. “All funds not needed for Intel must be reserved to reduce open financial issues in the federal budget,” wrote the FDP chairman on Platform X. “Anything else would not be responsible politics.”

Federal Minister of Economics Robert Habeck (Greens) defined: “We will now discuss together how we can use unused funds sensibly and carefully and use them for the good of the country.” The ministry mentioned the cash was earmarked for the Climate and Transformation Fund, generally known as the KTF, and was not obtainable for the core finances. There is a billion-euro hole within the fund, as within the federal finances.

Reduction of round 15,000 jobs introduced

Intel is beneath strain. In the final quarter alone, the corporate incurred billions in losses – and analysts expect additional losses. CEO Pat Gelsinger is taking motion and introduced firstly of August that he’ll lower round 15,000 jobs. That's round 15 % of the workforce. In whole, he needs to avoid wasting greater than ten billion {dollars} by subsequent 12 months.

Plans in Poland may even be suspended for this era. At the identical time, Intel confirmed investments in new factories in its house market of the USA and is growing new chips with Amazon's cloud division.

A primary constructing allow for the factories in Magdeburg was issued a number of weeks in the past. This was preceded by a number of months of reviewing a 2,000-page constructing software and a listening to with associations and municipalities.

The EU Commission would have needed to approve the federal authorities's funding. Representatives of the state authorities of Saxony-Anhalt had not too long ago repeatedly expressed optimism that the EU would launch state support by the tip of the 12 months and that development would then start.

Intel as soon as dominated the business

Gelsinger's technique consists of making Intel extra of a contract producer for different chip builders. The firm is to grasp essentially the most fashionable manufacturing processes in an effort to compete in opposition to established producers reminiscent of TSMC from Taiwan. The development of the plant in Magdeburg was additionally a part of these plans.

Intel as soon as dominated the chip business, however then fell behind. A decisive second was the misplaced battle for area in smartphones. Intel hoped to switch its energy within the PC enterprise to cell units – however extra economical processors prevailed in cell phones. Smartphone chips due to this fact don’t come from Intel, however from rivals reminiscent of Qualcomm or TSMC.