Intel is set to invest over €30 billion ($33 billion) in Magdeburg, Germany reports Reuters. The deal also involves an agreement of €10 billion ($10.91 billion) in government subsidies to build a fab. The deal was formally signed on Monday. In addition to build a new chip fab in Germany, Intel will also build a new fab in Israel, according to Israel's Prime Minister, Benjamin Netanyahu via another Reuters report.
Intel's site near Magdeburg, Germany, is expected to encompass at least two fabs that will cost over €30 billion, though the total investment in the campus is yet to be determined. The initial fabs will be used to build chips "at a more advanced technology than originally planned," a statement by Intel reads. Meanwhile the company does not disclose which node it is talking about, though it notes that that the technology will belong to the Angstrom era, which means 18A, 20A or other sophisticated processes.
Intel purchased the land required for its new project in November 2022. Following the European Commission's sanction of the incentive package, it is anticipated that the initial facility will commence operations within a timeframe of four to five years. Given the timing, expect the new fab to start operations in the second half of this decade.
In addition to building an all-new site in Germany, Intel will also expand its fab in Kiryat Gat, Israel. The company intends to invest $25 billion in constructing its new factory in Israel, according to the country's Prime Minister, Benjamin Netanyahu. This investment is the largest ever international financial commitment to the country.
The Kiryat Gat fab is anticipated to commence operations in 2027 and continue at least until 2035, and the Israel Finance Ministry expects it will generate thousands of jobs. As part of the agreement, Intel's tax rate will be raised to 7.5% from the current 5%.
"Our intention to expand manufacturing capacity in Israel is driven by our commitment to meeting future manufacturing needs and we appreciate the continued support of the Israeli government," a statement by Intel issued to Reuters reads.