Intel, Germany finalize deal for €30bn wafer fabrication site in Magdeburg

Intel has inked a revised letter of intent with the German federal government regarding the development of its wafer fabrication site in Magdeburg, Germany‘s Saxony-Anhalt state capital.

This agreement pertains to Intel’s enhanced investment in the location, now projected to exceed €30 billion for two pioneering semiconductor facilities in Europe.

The updated agreement includes amplified governmental assistance, comprising incentives tied to the project’s expanded scale and the evolving economic landscape since the initial announcement.

Germany Chancellor Olaf Scholz said: “Today’s agreement is an important step for Germany as a high-tech production location – and for our resilience. Intel’s semiconductor production in Magdeburg is the single largest foreign direct investment in German history.

“With this investment, we are catching up technologically with the world’s best and expanding our own capacities for the ecosystem development and production of microchips. This is good news for Magdeburg, for Germany and for all of Europe.”

Rendering of Intel’s €30bn wafer fabrication site in Magdeburg, Germany. Image courtesy of Intel Corporation.

The land for the wafer fabrication site in Magdeburg was secured by Intel in November 2022, with the first facility expected to commence production within four to five years, pending approval of the incentive package by the European Commission.

Given the current timeline and investment magnitude, Intel anticipates the implementation of more sophisticated Angstrom-era technology in these facilities than originally planned. The wafer fabrication site in Magdeburg is intended to serve both Intel products and Intel Foundry Services clientele.

Intel’s monumental investment is projected to stimulate substantial economic advantages throughout Magdeburg, Saxony-Anhalt, Germany, and the wider European Union.

In addition to Intel’s extant wafer fabrication facility in Ireland and the newly proclaimed semiconductor assembly and test facility in Poland, the wafer fabrication site in Magdeburg will establish a unique, cutting-edge semiconductor manufacturing value chain across Europe. This robust infrastructure is set to bolster the resilience of the EU’s semiconductor supply chain.

Designated as the “Silicon Junction,” the site will act as a nexus for various innovation and manufacturing centers across the country and region, thus fostering the growth of an extensive technology industry ecosystem. The initial construction phase is expected to create 7,000 jobs, with an estimated 3,000 permanent high-tech positions at Intel and tens of thousands of additional jobs across the industry ecosystem.

Adhering to its 2030 sustainability targets, Intel is dedicated to achieving net positive water use, 100% renewable energy for its global manufacturing operations, and zero total waste to landfills at the Silicon Junction.

Pat Gelsinger — Intel CEO said: “Building the ‘Silicon Junction’ in Magdeburg is a critical part of our strategy for Intel’s growth. Combined with last week’s announcement of our investment in Wrocław, Poland, and the Ireland sites we already operate at scale, this creates a capacity corridor from wafers to complete packaged products that is unrivaled and a major step toward a balanced and resilient supply chain for Europe.

“We’re grateful to the German federal government, Chancellor Olaf Scholz and the government of Saxony-Anhalt for their partnership and shared commitment to fulfilling the vision of a vibrant, sustainable, leading-edge semiconductor industry in Germany and the EU.”