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German broadcaster MDR reports that Intel will build an enormous chip factory in Magdeburg. According to the broadcaster, Intel will officially announce the news next week.

In a 2021-interview with Techzine, Intel revealed that it was considering ten European locations for a new chip factory. Most of the locations were in Germany.

Today, MDR announced that Intel opted for Magdeburg, Germany. The broadcaster shared the news based on anonymous sources. According to MDR, the official news will be announced next week.

Magdeburg is the second-largest city in Saxony-Anhalt, a German state. Throughout 2021, the regional government promoted Magdeburg as a suitable location for a chip factory. In the past few weeks, MDR was informed of a new project that would create more than 1,000 jobs in Magdeburg. Now, the broadcaster claims that this project concerns an Intel chip factory.

The news is a blow to Dresden, the capital of Saxony-Anhalt. The regional government was hoping that Intel would choose their city. “Dresden already has an ecosystem (for chip production). Magdeburg can’t offer the same”, said Hubert Lakner, head of the Fraunhofer Institute for Photonic Microsystems.

European Chips Act

We expect the decision to be related to the European Chips Act, a recent European legislative proposal. EU member states will be allowed to invest state funds in chip manufacturers. Currently, state aid is only allowed for chip developers and pilot projects.

Recently, the Financieele Dagblad (a Dutch newspaper) reported that the German chip industry expects billions of euros in state aid. Although there’s no direct evidence that Intel chose Germany and Magdeburg because of the latter, we have every reason to suspect a connection.