German Intel fab delayed, but not canceled, official says

Intel is still committed to building a fab in Magdeburg, general manager EMEA Frans Scheper told Het Financieele Dagblad. “We’re 100 percent committed,” he said. “Things are moving a little slower than we expected due to the downturn in the economy, but at Intel we’re doing everything we can to keep this project going.” Construction has been delayed by at least a year, however.

The initial investment for the fab was originally set at 17 billion euros, of which the German government would cover 6.8 billion euros. Due to inflation, rising energy cost and lowered demand, costs have reportedly risen to 20 billion euros. Intel still wants 40 percent in subsidies, which would mean that it expects Germany to chip in an additional 1.2 billion euros. Even with government support, “it will be very difficult to compete with Asia and the US,” Scheper stressed.

Energy prices are of particular concern. “If prices stay at the current level, it becomes really difficult to make it viable. This year, we will go over all assumptions and costs again. We are optimistic that we will end up at a lower power price level. It’s already moving in the right direction.”