Thursday, February 9th 2023

Intel Asking Germany for More Money, Set to Potentially Invest in Vietnam

To date, Intel has been promised almost €6.8 billion in subsidies from the federal German government, but apparently this isn't enough for Intel, as the company is now asking for an additional €3.2 billion, for a total of €10 billion is subsidies for its Magdeburg fab. The total investment in the fab in Magdeburg—which was announced back in March 2022—is said to be around €33 billion. In other words, Intel is asking Germany to pitch in almost a third of the cost for its shiny new fab. According to an Intel spokesperson quoted by the Register, Intel is worried about the current geopolitical situation and that the demand for semiconductors has declined, plus the fact that inflation has made everything much more expensive. Intel's Arizona fabs ended up costing an extra US$5 billion, which is about a third extra compared to the original cost estimate, so it's not hard to see why Intel is asking for more money here.

At the same time, the Vietnamese government jumped the gun and announced that Intel is looking at investing US$3.3 billion in the country, as part of an announcement of investments of a total of US$7.4 billion in Ho Chi Minh, by foreign companies. The additional US$4.1 billion investments apparently hinges on Intel's investment in the country, more specifically in the Saigon Hi-Tech Park. The official stance from Intel is that "Vietnam is an important part of our global manufacturing network, but we have not announced any new investments." It's unclear what the exact plans are, but Intel is said to have met up with government officials in Vietnam, according to Bloomberg. It's likely that it would be some kind of chip packaging facility, much like what Intel and AMD already has in Malaysia and China, among other places.
Sources: The Register (Magdeburg), The Register (Vietnam)
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43 Comments on Intel Asking Germany for More Money, Set to Potentially Invest in Vietnam

#1
AnotherReader
Is GlobalFoundries' Dresden fab still the most advanced fab in Germany?
Posted on Reply
#2
KrazyT
If I were the Geman Gov. i'll say : f*ck you intel, take your factory and stay away from my country !
1/3 of the building cost ...
Ok, economics in this are should grow, many workers, partners ... taxes (if they pay some ... ).
But when the situation will goes bas, they won't hesitate to closed the factory, and laid all the workers.
There is many example in France, factory asks for public funds to rise up (Continental, Ford ...) and then shut the doors.
It's not the same scale, but when I started my little lab (of 2 persons :) ) nobody gaves me a $/€ !
Posted on Reply
#3
Fluffmeister
No fabs for us as we weren't going to throw money at them!
Posted on Reply
#4
Assimilator
The German government shouldn't be subsidising Intel or indeed anyone, they should be investing money for part ownership. The whole "give private companies boatloads of money and hope they won't shaft you at the first opportunity to make a buck" nonsense is exactly how we got into this situation in the first place. Capitalism has time and time again been demonstrated as an abject failure when it comes to core industries; if something is important enough to dump 10 billion of taxpayers' money into, it's important enough for the government to be running it.
Posted on Reply
#5
ThrashZone
Hi,
Keep the $$ and give intel the universal finger salute
Posted on Reply
#6
Darmok N Jalad
As Don Henley once sang, “A man with a briefcase can steal more money than any man with a gun.”
Posted on Reply
#7
lemonadesoda
If the German gvt falls for this, they are idiots.

Intel has highly paid consultants telling the German State about the "economic multiplier" effect of building the fab in Dresden. Local jobs. Contracts to German suppliers etc. Learning of methods. etc. They then present it as a $x billion cost, but with a 10 year benefit of $x times 3. Only a fool believes that shark. But the gvt is riddled with gullible fools.

Just like 99% of all US companies investing in Germany, they will have internal transfer price costs, taking away all profits and redistributing them elsewhere, so the German Federal State will earn ZERO tax revenues.

So this is a test: German gvt goes for it... they are fools, again. They don't go for it... they are beginning to wise up to the US nefarious ways. Popcorn please und ein bier.
Posted on Reply
#8
TumbleGeorge
lemonadesodaIf the German gvt falls for this, they are idiots.

Intel has highly paid consultants telling the German State about the "economic multiplier" effect of building the fab in Dresden. Local jobs. Contracts to German suppliers etc. Learning of methods. etc. They then present it as a $x billion cost, but with a 10 year benefit of $x times 3. Only a fool believes that shark. But the gvt is riddled with gullible fools.

Just like 99% of all US companies investing in Germany, they will have internal transfer price costs, taking away all profits and redistributing them elsewhere, so the German Federal State will earn ZERO tax revenues.

So this is a test: German gvt goes for it... they are fools, again. They don't go for it... they are beginning to wise up to the US nefarious ways. Popcorn please und ein bier.
You describe things too naively. Politicians are not idiots. Rather, it's a way for them to benefit themselves personally with cash while gifting solid budget funds to a huge corporation. Pure corruption.
Posted on Reply
#9
kondamin
It's the EU that want's high end silicon production on shore.
I don't understand why Intel picked Germany over France it was obvious even 5 years ago France would be a better pick when it comes to energy prices.
Germany is ********** when it comes to energy and it's only got worse with the US's actions concerning russian gas.

So yeah coughing up the extra billions is what germany will have to do if they want intel to build a fab.
It would be far cheaper than somehow building out a true european semiconductor manufacturer (which would be better, but that would take at least 15 years before it starts making something of value)
Posted on Reply
#10
sanamarcar
But why choose Intel over TSMC, if Intel is having a hard time selling CPUs and GPUs right now. I don't see Intel in a very good position, especially when the most advanced foundry machines are made in Europe...
Posted on Reply
#11
lemonadesoda
TumbleGeorgeYou describe things too naively. Politicians are not idiots. Rather, it's a way for them to benefit themselves personally with cash while gifting solid budget funds to a huge corporation. Pure corruption.
Quite right indeed!

Politicians are not idiots. Rather, it's a way for them to benefit themselves personally, whilst waving their hands at the fiscal debts, passing on the cost to the taxpayer, without it being obvious. Pure corruption.
Posted on Reply
#12
noel_fs
give nothing to intel honestly, anyone else please
Posted on Reply
#13
Wirko
AssimilatorThe German government shouldn't be subsidising Intel or indeed anyone, they should be investing money for part ownership. The whole "give private companies boatloads of money and hope they won't shaft you at the first opportunity to make a buck" nonsense is exactly how we got into this situation in the first place. Capitalism has time and time again been demonstrated as an abject failure when it comes to core industries; if something is important enough to dump 10 billion of taxpayers' money into, it's important enough for the government to be running it.
Apart from shares, there are other means to finance a business and eventually, probably, get something in return. Corporate bonds, government loans (and/or loan guarantees), tax breaks, and sure there's more. But is there anything sweeter than briefcases full of ... those?
Posted on Reply
#14
mechtech
Ahhh venture capitalism at its best. Give me everything and pay for everything so I can have everything including 100+ mill/yr salary.................
Posted on Reply
#15
TumbleGeorge
Bomby569The EU needs their own companies
Agree. More companies is good for costumers. Not more fabs of one company.
Posted on Reply
#16
Fluffmeister
Maybe another EU member state should open their wallet to get some Intel love, I'm sure the EU commission don't care where Intel invest as long as it is in the EU superstate.
Posted on Reply
#17
trsttte
Here's an idea, instead of dumping money on intel, dump money on a new foundry to compete with the established folks. Flashy last gen nodes are great for headlines but the vast majority of equipment is made on older litography.

But anyway, we're going to see a big bust from the whiplash of heavy and miscalculated investment in the field during the pandemic at the same time as an economic downturn and reduced consumption so who cares.
Posted on Reply
#18
Fatalfury
i wonder if INTEL will also ask additional $4 Billion when they realize that EU/US labour is more expensive than chinese/asian workforce.
Posted on Reply
#19
KrazyT
kondaminI don't understand why Intel picked Germany over France it was obvious even 5 years ago France would be a better pick when it comes to energy prices.
'cause France is the land of the Strike !
I could go wrong, but i think it can scare many big industries to produce in France, syndicate is strong and often angry (for good or bad reasons, depends)

When multimillionaires bosses of top industries reunites in some restaurant, they talk about their cars, house, leisures and stuffs, and they spread the word : don't go to France ! :D

Seems they're doing some kind of talking to raise the auction, and get the best bidder ...
Posted on Reply
#21
BoboOOZ
KrazyT'cause France is the land of the Strike !
I could go wrong, but i think it can scare many big industries to produce in France, syndicate is strong and often angry (for good or bad reasons, depends)

When multimillionaires bosses of top industries reunites in some restaurant, they talk about their cars, house, leisures and stuffs, and they spread the word : don't go to France ! :D

Seems they're doing some kind of talking to raise the auction, and get the best bidder ...
No, it's because France already has a large semiconductor company that they are subsidizing, ST Micro, which is a joint French/Italian venture, and unlike Intel, STMicro has most of it workforce and production in Europe.
kondaminIt's the EU that want's high end silicon production on shore.
I don't understand why Intel picked Germany over France it was obvious even 5 years ago France would be a better pick when it comes to energy prices.
Germany is ********** when it comes to energy and it's only got worse with the US's actions concerning russian gas.

So yeah coughing up the extra billions is what germany will have to do if they want intel to build a fab.
It would be far cheaper than somehow building out a true european semiconductor manufacturer (which would be better, but that would take at least 15 years before it starts making something of value)
A few years ago Germany had a large economic surplus and looked like the perfect candidate. Indeed the picture might be very different today.
Posted on Reply
#22
ymdhis
lemonadesodaIf the German gvt falls for this, they are idiots.
The German government will fall for this.
Posted on Reply
#23
stimpy88
They really should stop throwing tax-payers money at the richest companies in the world...
Posted on Reply
#24
Wirko
BoboOOZNo, it's because France already has a large semiconductor company that they are subsidizing, ST Micro, which is a joint French/Italian venture, and unlike Intel, STMicro has most of it workforce and production in Europe.
STM is also partly owned by the French and Italian governments.

However, as says Wikipedia, they're now a Dutch company with HQ in Switzerland, which probably means that their revenue crosses so many borders and mountains that no one knows where it's gone eventually.
Posted on Reply
#25
AnarchoPrimitiv
AssimilatorThe German government shouldn't be subsidising Intel or indeed anyone, they should be investing money for part ownership. The whole "give private companies boatloads of money and hope they won't shaft you at the first opportunity to make a buck" nonsense is exactly how we got into this situation in the first place. Capitalism has time and time again been demonstrated as an abject failure when it comes to core industries; if something is important enough to dump 10 billion of taxpayers' money into, it's important enough for the government to be running it.
Agreed.

Intel is basically going door to door with its hand out, demanding money, and I guarantee they want that money with no strings attached, so that they can immediately throw out the work force at any moment if the stock price goes down a few percentage points.
Posted on Reply
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