Intel demands additional €5B for German fab

Intel is petitioning the German government to top up the previously agreed upon 6.8 billion euros in subsidies with another 5 billion euros, Bloomberg reports. The US semiconductor manufacturer says that costs have ballooned from an originally estimated 17 billion euros to 30 billion euros. “Disruptions in the global economy have resulted in increased costs, from construction materials to energy,” Intel says in a statement.

Construction of the fab first announced in March 2022 and scheduled to start in H2 2023 was put on hold in December. Intel said it was still “100 percent committed” to its construction, but until now it was unclear by how much costs have inflated and how much more subsidies it would be asking for.

The European Chips Act allows for member states to cover a maximum of 40 percent of total investment. That would be 12 billion euros on an investment of 30 billion euros. Intel said it’s discussing the increased support requirement with the German government. The Economy Ministry declined to comment on these talks but said it’s still prepared to support the semiconductor industry.