MAGDEBURG, Germany (Bernama-dpa) -- Intel says it is in negotiations with the German government about increasing subsidies that Berlin is paying the US microchip manufacturer in connection with factories it is building in the German city of Magdeburg, reported news agency dpa.
Additional funds are needed due to rising costs, an Intel spokesman said on Thursday.
“We are working closely with the German federal government to close the existing cost gap,“ he added.
A lot had changed since Intel announced its plans to build several factories for chip production in Magdeburg, he added: “Geopolitical challenges have grown, global demand for semiconductors has fallen, and increased construction costs, energy prices, and inflation are challenging the global economy.”
Intel is reportedly demanding €10 billion (US$10.8 billion) in financial aid from Berlin, against the previously promised €6.8 billion.
The German financial daily Handelsblatt reported that the US group is expecting higher costs for the project in Magdeburg, located some 120 kilometres west of Berlin.
Intel has the largest share of the lucrative global market for semiconductors in personal computers and servers.
In March 2022, Intel announced that the latest generation of chips would be produced in Magdeburg, the state capital of Saxony-Anhalt, from 2027.
At the time, Intel said it planned to invest at least €17 billion.
Additional talks between the German government and Intel are planned this week and next week.-Bernama
