The European Union has realized, casually, that the fact that all the chip production factories are in Asia and the United States is not positive. To do this, they want the big chipmakers to open new plants on the mainland. Intel is very interested in establishing itself in Germany , but 6,800 million euros in aid is not enough for them.
Intel has had the most interest in establishing itself in Europe, due to its strong presence in the automotive chip market. Among the countries that applied (which was not Spain) they have chosen Germany, since it was the one that provided the most subsidies.
Intel extorts Germany to establish itself there
During the COVID pandemic, a brutal shortage of chips was generated for all segments. Faced with this shortage, the price of chips rose brutally, as well as transportation costs. It seems that in the EU they connected the dots and realized that handing over chip manufacturing to China had not been a good idea. Now they plan to bring back some of the chip production they let go.
Germany is one of the technologically leading countries within the EU. The country has offered Intel a check in the form of a $6.8 billion grant , which is a remarkable amount. Intel even has the site for the construction , in the German town of Magdeburg. But now they ask for more money.
One of the reasons for wanting more money to establish itself in Germany would have to do with the Intel factories in Arizona, United States. Reportedly, these plants would have had an additional cost of 5,000 million dollars , a third of the initial cost.
Well, now Intel asks 10,000 million euros , almost a third of the cost, to Germany to settle there. An Intel spokesperson would have told The Register that the reason would be the current geopolitical situation and the reduction in demand for chips. It would also have to do with inflation, which has made everything more expensive.
We imagine that the geopolitical situation would refer to the invasion of Ukraine by Russia. Also to the threats that Sweden and Finland have received from Russia if they join NATO.
Vietnam, a rather uncomfortable guest
While this is happening, Vietnam has announced an investment plan of 7.4 billion dollars. Within this plan, $3.3 billion could go to Intel, if it wants to. The figure could reach 4.1 billion dollars, depending on the amount invested by Intel.
The only condition for the Vietnamese is that they settle in Siagon Hi-Tech Park, a major technology park. Intel is not considering new investments at the moment, according to what they indicate, which closes the door to the proposal. Although from Intel they emphasize that Vietnam is an important country in its global manufacturing network.
So we have a somewhat complex situation, when everything seemed quite clear a few months ago. Everything indicated that Intel agreed on all terms to establish itself in Germany. What’s more, as far as we know, Intel would have the land and start and end times for construction on German land.