Intel Expands Semiconductor Production in Europe, Investing 42 Trillion Won in Germany

American semiconductor company Intel will invest more than 30 billion euros (approximately 42.1 trillion KRW) to expand its semiconductor manufacturing plant located in Magdeburg, Germany. This investment increase is a response to the European Union's (EU) move to declare a challenge for 'semiconductor supremacy' and to open a fund for subsidies, expanding the investment beyond the original plan.

[Image courtesy of Intel]

According to Intel on the 19th (local time), German Chancellor Olaf Scholz and Intel CEO Pat Gelsinger signed an investment agreement under the financial support of the German government in Berlin, Germany. Chancellor Scholz emphasized, "Today's agreement is an important step for Germany's resilience as an advanced technology production base," adding, "Intel's semiconductor production in Magdeburg is the largest single foreign direct investment in German history."

The 30 billion euros Intel is investing in Magdeburg, Germany, is nearly double the initially planned 17 billion euros. Accordingly, the German government has also decided to significantly increase the subsidies paid to Intel. Although the exact amount was not disclosed, DPA news agency reported citing sources that it is expected to increase from the existing 6.8 billion euros to about 9.9 billion euros. The German government's financial support must first be approved by the EU.

Through this investment, Intel expects to create approximately 3,000 advanced jobs. Previously, in November last year, Intel purchased the site for this project called 'Silicon Junction.' Intel also decided the day before to invest 25 billion dollars to build a new semiconductor plant in Israel, which is effectively part of the EU semiconductor supply chain. Prior to that, Intel planned to establish a new semiconductor plant worth 4.6 billion dollars near Wrocław, Poland. Intel already operates plants in Ireland and other locations.

Intel stated, "Intel's investment will help build the foundation of the next-generation European semiconductor ecosystem and accelerate the EU's goal of a resilient semiconductor supply chain."

[Image source=Reuters Yonhap News]

Intel's recent investment moves are also aligned with the EU and Germany's efforts to strengthen the semiconductor supply chain. The European Commission proposed the EU 'Chips Act' under the goal of increasing the EU's share of global semiconductor production from the current 9% to 20% by 2030. The EU plans to invest a total of 43 billion euros to expand the regional semiconductor supply chain, attracting the attention of global semiconductor companies. The EU is one of the three largest markets consuming 20% of the world's semiconductors, but its production capacity is only 10%, resulting in high external dependence, which has been identified as a problem.

Germany, a manufacturing powerhouse, is also actively working to build a semiconductor supply chain. Deputy Chancellor Scholz attended an industry event that day and stated that efforts are underway to encourage semiconductor production within Europe and reduce Germany's dependence on imported semiconductors and global supply chains. He emphasized that if all current investment plans, including Intel's investment, are implemented, Germany will become one of the world's largest semiconductor production bases.

This content was produced with the assistance of AI translation services.