Intel chooses Magdeburg in Germany to set up a new multi-billion euro chip factory

Intel has chosen the eastern German city of Magdeburg as the site of a new multibillion-euro European chip factory and will make the decision public on March 4, a person familiar with the matter told Reuters.

The company said in September it could invest up to $95 billion in Europe over the next decade and announce the location of two new major European chip factories by the end of 2021, but no announcement was made.

Germany topped the list of potential sites, with local governments in Penzing in Bavaria and Magdeburg and Dresden in eastern Germany trying to tempt American society.

Analysts had said Intel could wait until new legislation is introduced before deciding on a European site. The European Chips Act aims to reduce the continent’s dependence on Asian suppliers of advanced semiconductors by subsidizing the local development of large chip factories.

Managing Director Patrick Gelsinger visited Europe last year. Government subsidies, stability and the availability of skilled workers were factors that encouraged the CEO to choose Germany for the new plant, the source said.

Germany is also home to many of the world’s biggest automakers, which have been hit particularly hard by the global chip shortage.

The small town of Magdeburg is the capital of the state of Saxony-Anhalt. It hosts the Otto von Guericke University and has space for a new factory in the Eulenberg industrial area in the southwest.

It’s unclear when production might begin.

Intel, which in January announced plans to build a US$20 billion chip-making complex in Ohio, is likely to consider France and Italy for new sites in Europe as it considers to build a design center and a packaging plant, the source added.

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