The company behind the $20 billion semiconductor project in New Albany, the state’s biggest economic development project in history, is close to winning nearly $10.8 billion in subsidies to build a plant in Germany, according to media reports.
Intel’s CEO, Pat Gelsinger, is expected to wrap up the package with German officials this weekend for the plant that Intel wants to build in Magdeburg, west of Berlin, German news outlet Handlesblatt reported this week.
The German government initially offered about $7.5 billion in subsidies to Intel for the plant, but Intel said it needed more because of higher energy costs and the use of more advanced technology inside the plant, according to reports.
The plants in Magdeburg and New Albany are part of Intel’s overall effort to boost global production of the tiny chips that power everything from cell phones to military equipment.
Intel, under Gelsinger, has promised to restore production of semiconductors to the U.S. and Europe. Production has largely moved to Asia in recent decades.
Intel was among the semiconductor companies pushing for the U.S. government to offer subsidies as well that the industry argued were necessary to make the U.S. competitive with the lower costs of Asian countries.
Last year, President Biden signed into law the CHIPS Act that will provide $52.7 billion in subsidies for companies to research, design and manufacture semiconductors and to help with workforce development. The legislation provides a 25% tax credit for capital expenses for making semiconductors and related equipment that are estimated by the Congressional Budget Office to be worth $24 billion over five years.
Intel figures to ultimately win billions of dollars of incentives for the two plants it’s building in New Albany that will employ 3,000 workers when they open in two years.
Beyond the billions from the CHIPS Act, the state is providing incentives topping $2 billion and the city of New Albany is offering property tax abatements.
@BizMarkWilliams