Intel is to build a $4.6 billion semiconductor assembly and testing plant in Poland, as the U.S. chipmaker bets Berlin will bow to its demands for more subsidies for a planned German border manufacturing plant.
The Wroclaw facility will help meet “critical needs for assembly and testing capabilities” that Intel says it expects to be ready by 2027. At that time, its 17 billion-euro wafer fabrication plant in Magdeburg, Germany, is expected to be operational.
But since announcing its plans for Germany last year, the U.S. chipmaker has waged difficult talks with Berlin, arguing that inflation and higher energy costs made the 6.8 billion euros in subsidies the government initially promised for the project fall short.
Intel is now asking the government for an additional €4bn in support – an amount that German Finance Minister Christian Lindner ruled out in an interview with the Financial Times. “There is no more money available in the budget,” Lindner said two weeks ago.
However, German media have been reporting that Berlin may give in to Intel’s demands.
Several European countries are racing to reduce their reliance on Asian semiconductor suppliers after shortages caused by the pandemic wreaked havoc on several of their key industries.
However, the chips Intel specializes in are not the type of chips that Europe’s big auto industry relies on. That has critics questioning whether Berlin’s courting of Intel is the best use of taxpayer dollars.
Intel, which also makes wafers in Ireland, said the Polish factory is expected to create 2,000 jobs.
Polish Prime Minister Mateusz Morawiecki said he was “delighted to expand Poland’s role in the global semiconductor supply chain”. Intel’s largest R&D center in Europe is located in the Polish city of Gdansk, employing about 4,000 people.
The Polish government did not immediately respond to a question about how much it would pay Intel for the plant in the country.
Intel declined to say how much subsidy it would receive from Warsaw, but said, “As in all locations where it operates, Intel will seek appropriate incentives. . . to ensure its operations are globally competitive”.
A person close to Intel Chief Executive Pat Geisinger said Friday in Wroclaw that he will travel to Berlin to continue talks with the German government after a brief stop in Gdansk.