Intel fallout: squabble over subsidy money

Intel's economic dry spell is also causing problems for German politicians. The construction of the two planned semiconductor plants by the subsidiary Intel Foundry will not begin for at least two years because Intel has to save money. All investments outside of Ireland are on hold – and progress in Ireland is only being made because an investor is contributing billions of euros.

Specifically, two questions remain unanswered:

• What happens to the almost 10 billion euros that the federal government wanted to subsidize for construction?
• What about the arable land for Intel's plants?

In the case of the land, there is basically a plan B for the settlement of other companies. However, Saxony-Anhalt's Minister President Reiner Haseloff wants to hold on to Intel's settlement. All permits would be valid for three years, meaning that construction could begin in two years. Intel already owns the site.

Unlike the federal government, the state is not involved in business development, but only in the development of the high-tech park. There should be a follow-up team to ensure a "stand-by mode" over the next two years. This group will consist of the Federal Chancellery, the State Chancellery and the Saxony-Anhalt Ministry of Economic Affairs as well as Intel.

"It is such a strategically significant investment that there should be no speculation or thought about canceling something like this at this point in time," says Haseloff. There has never been such an investment in this technology in Germany before. Intel is also aware of this.

The question of money

Discussions are now being sparked above all about what will happen directly with the 10 billion euros. The funding should come entirely from the Climate and Transformation Fund (KTF) of the Federal Ministry for Economic Affairs and Climate Protection (BMWK). It states:

"We have done everything on the part of the state to get the Intel project off the ground. Many in the region are banking on semiconductor production, which is expected to create jobs and added value in the future. However, it is now up to Intel to quickly get back on a path that will enable investment."

[...]

"The funds are earmarked in the KTF and are not available to the core budget."

Federal Finance Minister Christian Lindner, on the other hand, polarizes on X: With the 4 billion euros for 2024 and the further 6 billion for the following years, the 12 billion euro budget hole must be largely plugged. However, this is legally questionable due to the KTF allocation.

Wait and see and drink tea

Federal Chancellor Olaf Scholz remains neutral on the matter:

"The decision to postpone the project in Germany for two years now does, after all, include the statement that we want to stick with it."

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"For us, it is important that we take this opportunity in this very volatile business of the semiconductor industry to contribute to the further expansion of the already profound capacities in Germany."

[...]

"In this case, this is a project that we would have liked to realize quickly. Now, due to the difficult situation for the company, we have to see that this does not happen immediately. However, it remains true that for our sovereignty, for our technological leadership, we also insist that semiconductor production takes place in Europe and especially in Germany. The expansion will continue."

On the use of the 10 billion euros, Scholz said:

"I assume that we will simply use our opportunities in all directions. It's not just black and white."

Federal Economics Minister Habeck would like to consult with the government partners before making any concrete public statements:

"We have done our homework. We will discuss how to proceed with the reserved funds behind the scenes in the government."

Meanwhile, the Polish government has published a statement on the delayed packaging work there:

"The Ministry of Digitization takes note of Intel's global plans, but assures that it is ready to intensively support further semiconductor investments in Poland in the coming months."

(olb)