Intel is committed to Magdeburg – energy costs “are a huge issue”


Pat Gelsinger

The Intel boss is committed to the investments in Magdeburg.

(Photo: Bloomberg)

Davos, Munich intel-Boss Pat Gelsinger has acknowledged the planned billion-euro investments in Magdeburg. “The project as a whole is making progress,” said Gelsinger on Tuesday at a press conference on the fringes of the World Economic Forum in Davos.

After the unprecedented chip shortage of recent years, companies have realized that central elements of their supply chains cannot be dependent on just one location. It is therefore important both in the USA and to further expand production in Europe.

However, the new plants in Magdeburg would have to be “competitive.” Negotiations are still ongoing in Germany and the EU. “The European Union’s Chips Act is currently being finalized,” Gelsinger pointed out. In the past few months there had been repeated rumors that there could be delays in the construction of the works.

With a view to competitiveness, the costs for infrastructure and personnel are important, said Christoph Schnell, who is responsible for sales and marketing worldwide on the Intel board. But energy prices, which have increased significantly in Germany as a result of the Ukraine war, also played an important role. “Energy costs are a huge issue,” said Schell. But the talks would be ongoing, both with the city of Magdeburg and with the state Saxony-Anhalt.

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Last March, the US group announced that it would initially invest 17 billion euros in the construction of two state-of-the-art semiconductor factories in Magdeburg. The move is part of an offensive in Europe, in which the group wants to invest up to 80 billion euros in the EU.

The company from Santa Clara, California, wants to benefit from the subsidy programs of both the USA and the EU. With the increasing digitalization The group believes that the demand for semiconductors will double by 2030.

Politicians and managers around the world have long recognized the importance of the semiconductor industry. “The geopolitics of the past 50 years have been determined by where the oil fields were located,” Gelsinger said. “The location of the chip factories will be even more important in the next 50 years.”

More: Electronics association criticizes meager progress in Europe’s chip race to catch up



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