Intel delays construction of plants in Germany, but does not abandon the project

Intel has postponed construction of its Fab 29 chip manufacturing complex in Magdeburg, Germany, a decision made in close coordination with the state government of Saxony-Anhalt. The project will be reviewed in two years, when Intel will re-evaluate market conditions and make a final decision on its fate. Despite the financial difficulties, both parties remain interested in the project.

Image Source: Intel

To maintain the potential of the project, Intel continues to interact with local organizations and institutions through the government of Saxony-Anhalt. Thus, two top managers of the company recently visited the region – Naga Chandrasekaran, executive vice president and director of manufacturing and supply chain at Intel, and Christoph Schell, executive vice president and chief commercial officer of Intel, who noted that cooperation with the government is based on a “long-term commitment” to the region and the company’s customers in Germany and Europe.

It was originally planned that the Magdeburg factory would begin producing 1.5 nm chips by 2027, but due to financial problems the launch was postponed to 2030. At the same time, analysts have expressed doubts that the project will be implemented at all, although Intel plans to conduct a new assessment of the future project in 2026.

The delayed start-up also calls into question the 10 billion euro subsidy allocated by Germany for the plant’s construction. The amount could be repaid to the federal government, and it is unclear whether Intel would have to negotiate funding again if the project resumes. At the same time, the possibility of selling the plant in the future remains open, even if the company restores its financial stability.