It is make or break for Intel’s giant bet on Germany | 15 June 2023
ioi_ab's bookmarks 2023-06-19
Summary:
"The American chipmaker’s capital spending would constitute the biggest foreign direct investment in German history...Government’s decision to spend billions on subsidies for Intel’s mega semiconductor factory in Magdeburg...Olaf Scholz’s centre-left coalition government has agreed to prop up Intel’s mega-site in Magdeburg to the tune of €6.8bn ($7.4bn), a big chunk of Intel’s €17bn investment in the east German town. Christian Lindner, Germany’s pro-market finance minister, recently said there was no money in the budget to meet Intel’s demands for an extra €3bn or so in state aid to close a “cost gap” caused by the higher prices of energy and construction....Does the subsidy make sense for Intel? The firm needs a fillip. In recent years it has fallen behind rivals such as tsmc of Taiwan and Samsung of South Korea in cutting-edge technology. In April it reported a quarterly net loss of $2.8bn, its steepest ever, as global demand for many types of chip cooled. Its market value of $148bn is just over half what it was in early 2021. Mr Gelsinger believes that the way to reverse the decline is by investing heavily in new capacity ..."