Semiconductors | Intel buries Magdeburg chip factory

San Francisco. The project for a large new chip factory in Magdeburg has finally failed. The struggling US manufacturer Intel announced Thursday evening during the release of its quarterly results that it was abandoning construction. Saxony-Anhalt's Minister President Reiner Haseloff (CDU) spoke of a "painful day." The question now remains as to what will happen to the vast site originally intended for the factory complex.

Intel will "no longer proceed with planned projects in Germany and Poland," the company announced. The US corporation again reported a billion-dollar loss for the second quarter. Due to the difficult situation, construction of the factory in Saxony-Anhalt had already been put on hold last fall. A plant in Wrocław has now also been canceled.

It's good "that there is now clarity," explained Minister President Haseloff. In Magdeburg, the focus remains "on attracting high-tech companies." The development of the area planned for the Intel factory will continue, and there are "inquiries from well-known companies."

According to the original plans, Intel wanted to invest 30 billion euros in the construction of the production complex with six to eight factories. The federal government had promised subsidies of around 10 billion euros.

Left Party state parliament member Thomas Lippmann accused the state government of having "put all its eggs in one basket." "Several millions of euros from the state budget were used for preliminary work on the development of the Intel site." The area must now "be returned to state hands."

"Now the way is clear for new ideas and considerations regarding the use of the site."

Olaf Meister , Green Party Member of Parliament

Green Party state parliament member Olaf Meister wants to look ahead. "Now the way is clear for new ideas and considerations regarding the use of the site," he explained. He called for the continuation of former Economics Minister Robert Habeck (Green Party) and for the promotion of future-oriented large-scale investments in the technology sector. What will happen to the site must now be clarified quickly, explained AfD state parliament member Matthias Liescke. He also demanded clarification on the question of whether taxpayers' money was wasted in the Intel case.

IG Metall warned that Intel's rejection should not lead to a call into question the industrial policy ambitions for Saxony-Anhalt or the federal state as a whole. It added that the achievements made so far – "from available space and transport connections to the training of existing and future skilled workers" – could be built upon.

The president of the Munich-based Ifo Institute, Clemens Fuest, welcomed Intel's announcement because it would save the state ten billion euros. He said this was a setback for the region, but from an industrial policy perspective, the project didn't make sense anyway, he told broadcasters RTL and N-TV. "The idea was to produce semiconductors that German industry doesn't really need." Martin Gornig of the German Institute for Economic Research said that, given geopolitical tensions and global dependencies on microchips, Germany and the EU "must now push ahead with even more determination in building up their own chip production capabilities."

Intel long dominated the semiconductor market, but has been struggling for years. Other companies, including Taiwan's TSMC, are now industry leaders. Intel was surprised by its development of artificial intelligence (AI) chips. The company announced a loss of $2.9 billion for the second quarter. The tariff policy of the US administration under President Donald Trump also had a negative impact. In addition to the halt of its projects in Germany and Poland, a construction project in the US state of Ohio will also be delayed, it was reported.

Malaysian-born tech veteran Lip-Bu Tan took over as CEO of Intel in March and announced massive job cuts. The company announced that 15 percent of all current jobs had already been eliminated. By the end of June, the number of jobs had shrunk from 125,000 to 101,000, with the goal of 75,000 by the end of the year. nd/AFP