American tech leading company appends great German factory project
Date
9/23/2024 8:20:45 AM
(MENAFN) Intel, the United States technology giant, has announced a significant halt to the construction of two planned Semiconductor manufacturing plants in Magdeburg, Germany. This decision, revealed by CEO Pat Gelsinger, comes as the company grapples with declining sales and rising losses. The delay is expected to extend the timeline for the project by approximately two years.
Originally, Intel had ambitious plans for the Magdeburg site, earmarking over USD33 billion for the construction of the two factories, which were projected to create around 3,000 jobs. This initiative was part of a broader investment strategy aimed at bolstering chip production in the European Union. As part of this plan, Intel had secured about USD11 billion in state subsidies from the German government, underscoring the significance of the project for both Intel and the European Union’s semiconductor ambitions.
However, the ongoing financial challenges have compelled Intel to pause its expansion efforts. Earlier this year, the company initiated a cost-saving program in an effort to improve its financial standing, which has included the postponement of a new factory in Poland as well. In a letter to employees, Gelsinger emphasized the need for urgent action to create a more competitive cost structure, aiming to achieve USD10 billion in savings.
The Magdeburg manufacturing facility was slated to become the largest chip production site backed by the European Union’s Chips Act, legislation passed to enhance the region's semiconductor capabilities. Intel's delay raises concerns about the European Union's goal of capturing one-fifth of the global semiconductor market by 2030, as it could impede progress in achieving this target.
As Intel navigates these financial hurdles, the impact of this decision could resonate beyond the company itself, affecting the broader landscape of semiconductor production in Europe and the economic prospects tied to this critical industry.
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