Intel is seeking an additional 3.2 billion euros in state aid for the construction of its advanced chip factory in Magdeburg, Germany.

The German government has already pledged 6.8 billion euros towards the project, but Intel reportedly considers nearly 10 billion euros in total necessary. The company submitted its request for additional funding to government officials a few weeks ago and has been in talks with the German Ministry of Economic Affairs. Although no extra funding has been confirmed yet, insiders believe an agreement with Intel is expected to be reached.

Intel's Plans for Advanced Chip Factories in Germany in Jeopardy Due to Rising Energy Costs

Intel is reportedly considering spending billions of euros more on their new chip factories in Magdeburg, Germany due to the sharp increase in energy prices. While the company has not officially confirmed the amount, they have acknowledged that energy prices have surged by a factor of 4.5 since last year. This, combined with a drop in demand for computer chips, has resulted in financial struggles for the company, leading them to lower their revenue expectations.

In addition to rising energy costs, Intel is also planning to start manufacturing on more advanced nodes earlier than planned, which will further increase the cost of the factory. The company will also be relying more heavily on High-NA EUV machines compared to what is currently offered by machine builder ASML.

Intel had originally allocated 17 billion euros for the construction of the first two chip factories in Magdeburg, with plans to eventually expand to eight factories. The production was expected to start in 2027, with advanced processes being used. However, construction of the new campus may now be delayed until next year, and the company is focused on obtaining the necessary permits before beginning construction.

Board member Keyvan Esfarjani has emphasized the importance of being "cost efficient" and "economically competitive" in light of the rising energy prices and the need to ensure the success of the project. Despite the challenges, Intel is determined to build their advanced chip factories in Magdeburg and stay at the forefront of technological advancements.

Intel Seeks 10 Billion in Subsidies from Germany