Intel to Build $33B Chip Plant in Germany

Facts

• On Monday, California-based Intel Corporation confirmed signing a $33B deal with the German government to build two chip manufacturing plants in Magdeburg.¹
• The announcement comes after Berlin agreed to cover a third of the investment, or €9.9B [$10.7B], making it Germany's biggest-ever foreign investment.²
• The deal also comes after Intel announced plans for chip plants worth $4.6B chip and $25B in Poland and Israel, respectively.^[3]
• According to Intel, the facility in Magdeburg — along with chip plants in Ireland and Poland — will create an "end-to-end semiconductor manufacturing value chain in Europe."⁴
• News of Intel's investment followed the company's 2022 announcement to restructure its graphics chips business to keep up with competitors such as Nvidia and Advanced Micro Devices (AMD).⁵
• According to McKinsey, the global semiconductor industry — poised for a decade of growth — is expected to become a trillion-dollar industry by 2030.⁶

Sources: ¹Reuters, ²Associated Press, ³Bloomberg, ⁴Intel, ⁵Quartz, and ⁶McKinsey & Company.

Narratives

• Pro-establishment narrative, as provided by Deloitte Insights. Intel's multi-billion-dollar investment into the EU will significantly boost its chip production amid rising geopolitical tensions. Besides diversifying European supply chains, Intel's chip plants can make the EU more self-sufficient in semiconductors — optimizing the continent's semiconductor industry and allowing tech companies to source the chips in no time.
• Establishment-critical narrative, as provided by The Register. Intel's investment spree in the EU stems from the bloc's deteriorating relations with Beijing and the US' ongoing chip war with China. The move will backfire and hurt the EU and Western semiconductor industry as China is fighting back with new investments to make its chip manufacturing more self-sufficient. The PRC will soon catch up and overtake America in the technology stakes.

Predictions