Intel Corp is to delay construction of its planned German chip plant and is seeking more in government subsidies, Volksstimme reported.
The US-based chipmaker earlier this year announced plans for a mega site worth 17 billion euros (US$18 billion) in Magdeburg. Construction was set to begin by the middle of next year, and the German government planned to provide 6.8 billion euros in state aid.
The cost has risen to 20 billion euros, Volksstimme reported.
Photo: Reuters
Intel no longer has a planned start date for construction and wants the German government to increase subsidies, the report said.
Although Intel has not made any official announcements about a delay, it said in a statement on Saturday that “much has changed” since the company disclosed plans to build in Magdeburg.
“Geopolitical challenges have become greater, semiconductor demand has declined, and inflation and recession are disrupting the global economy,” the statement said.
The company is monitoring the situation, and “will pace these investments with the market,” it said. “We cannot predict the market recovery, but we do know it will recover as it always has in the past after a down cycle.”
The EU has an ambitious goal of producing 20 percent of the world’s chips by 2030.
The European Chips Act is still moving through the legislative process, but has already prompted a number of companies to make investments, of which Intel was the largest. High energy prices, a market downturn and even subsidies from the US’ Inflation Reduction Act could threaten the plans.
Meanwhile, former Volkswagen AG chief executive officer Herbert Diess is set to become chairman of the supervisory board at German semiconductor manufacturer Infineon Technologies AG, the company said on Friday.
Diess “is expected to assume the role,” subject to a vote at an annual general meeting in February, taking over from Wolfgang Eder, Infineon said.
Eder, who has been in the position since 2019, said Diess was “the ideal candidate to become my successor, touting his “excellent knowledge of the company and of the industry landscape.”
Infineon last month unveiled plans for a 5 billion euro new factory in the eastern German city of Dresden, as Europe races to reduce its reliance on semiconductors made in Asia.
A global shortage of semiconductors, spurred by a COVID-19 pandemic boost in demand for consumer electronics, has snarled international supply chains and forced manufacturers to trim production in a range of industries.
German vehicle manufacturers have been among those hit hard, as semiconductors are a crucial component in both conventional and electric vehicles.
Diess stood down as chief executive officer of Volkswagen in September, handing the wheel to former Porsche AG chief executive Oliver Blume after four turbulent years in charge.
Under Diess, Volkswagen became the first legacy vehicle maker to try to follow US upstart Tesla Inc by seeking to develop centralized electronic vehicles.
However, the drive proved controversial, with critics saying that Diess had moved too fast, while underestimating how complicated it was to shift in-house an operation that was not among the vehicle maker’s core expertise.
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
The Fair Trade Commission’s (FTC) ongoing review of Grab Holdings Ltd’s US$600 million acquisition of Foodpanda Taiwan’s operations, announced on March 23, has taken on fresh urgency as industry experts warn that the transaction could embed significant Chinese cybersecurity vulnerabilities into Taiwan’s digital infrastructure through Grab’s deep ties to autonomous-driving firm WeRide (文遠知行). Less than 16 months after the FTC blocked Uber Eats’ direct attempt to acquire Foodpanda Taiwan — citing potential combined market shares of 80 to 90 percent — the emergence of Grab as the buyer has prompted questions about whether the same competitive harm is simply being rerouted
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
RSS