Chip Giant Intel scraps plan for German factory, disappointment for EU

This article was last updated on July 25, 2025

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Chip Giant Intel scraps plan for German factory, disappointment for EU

Chip manufacturer Intel is scrapping the plan to build a production location in Germany. The company announced this at the presentation of the quarterly figures. The decision is a big disappointment for Europe and for the German government, who wanted to attract the company with a billion -dollar subsidy.

Intel has not been doing well for a long time. The American chip manufacturer is one of the three most important chip producers in the world, together with the Taiwanese TSMC and the Korean Samsung, but the company is unable to keep up with the competition. At the end of last year, CEO Pat Gelsinger had to clear the field.

The new CEO, LIP-BU TAN, now chooses to cut into planned investments. In addition to Germany, a smaller project in Poland is canceled. Intel saw his loss rise to 2.9 billion dollars in the second quarter. Turnover remained almost the same compared to the same period last year.

Wider European strategy

The German chip factory was part of a broader European strategy to get more production on the European continent. The need for this was inspired by the large chip shortage that arose during the Coronapandemie. Just like the US, Europe is highly dependent on production in Asia. Taiwan and China in particular are important players in this area.

EU correspondent Ardy Voting:

“The deletion of the Intel factory in Germany is very annoying for the European Commission’s ambition, because the EU wants to become more independent, especially when it comes to chips. Too great dependence on other countries has great risks. We also see that at Gas from Russia or critical raw materials from China.

The European Commission had set itself the goal of double the European market share in the chip sector from 10 to 20 percent in 2030. It was clear from the start that that would be a huge challenge. Not only in Europe, but worldwide, many billions are invested in new production locations. Intels Factory was an important part in the committee’s plan. Now that that is lost, achieving this goal will become even more complicated. “

The European Commission hoped to be able to realize new production locations with the so -called Chips Act. EU countries could make it extra attractive with subsidies to open new factories. Germany in particular has used this eagerly. The Berlin government was willing to deposit up to 10 billion euros in subsidies to have the factory built in Germany. The total project costs around 30 billion euros.

However, TSMC factory

The fact that Intel now definitively pulls the plug from the project means that the EU has no insight into a production site where highly advanced chips are produced. That was the big wish, because such production locations lack in Europe. At the same time, that is not so strange: parties that need advanced chips are outside of Europe. So that factory would probably produce mainly for customers outside of Europe.

TSMC is still building a factory in Germany, but it will focus on the production of less advanced chips, intended for the automotive sector.

Germany correspondent Charlotte Waaijers:

“For Germany, the definitive cancellation is bitter. When Intel announced the construction of the factories, it was received here with cheers. It would not only be good for the European independence of Asian manufacturers, it also had to show that Germany is an attractive location, albeit with a lot of subsidies.

The state where the factories were to come invested in better traffic connections and there were training programs supported by the company to prepare staff. It had to yield 3000 jobs. Now the hope is that another company can fill that gap, but that is not yet clear.

At the same time there is also relief in Germany, where the memory of battery manufacturer Northvolt is still fresh. He went bankrupt after the state had invested 600 million euros. The government has promised almost 10 billion euros in grant to Intel. That money is not disappearing in a factory that is not going well. “