Magdeburg seeks alternate financial backers following Intel's rejection
In a significant setback for Saxony-Anhalt and the European Union, Intel has scrapped its planned chip production in Magdeburg, Germany, worth 30 billion euros and expected to create 3,000 jobs [1][2][3][4]. The cancellation was officially announced by Intel on July 24, 2025, ending plans for the ambitious semiconductor factory.
The German government had earmarked about 10 billion euros in subsidies to support the project, reflecting national ambitions to strengthen semiconductor manufacturing in Germany and Europe [2][4]. However, Intel's cancellation came amid weak market demand and a broader global restructuring of its production operations [1][4].
The state of Saxony-Anhalt and Germany are now keen to find a replacement for the billion-euro investment lost with Intel's departure. As of now, no replacement companies for the Magdeburg site have been disclosed or confirmed in the public domain. The local and federal government remain interested in pursuing semiconductor development and establishing facilities in the region, as indicated by Germany's new "Hightech-Agenda" aiming to build at least three semiconductor plants [4].
Notable companies have expressed interest in the planned high-tech park on the Intel site. Federal Commissioner for Eastern Germany, Elisabeth Kaiser, expressed confidence that Eastern Germany would remain a significant location for semiconductor production [4].
The city of Magdeburg intends to buy back the land originally planned for Intel and put it back on the international market. Lydia Hüskens (FDP) suggested developing the entire industrial park and building necessary infrastructure, instead of relying solely on Intel [4].
The former coalition of SPD, Greens, and FDP justified the subsidies with the strategic interest of producing more computer chips in Germany. However, Irene Bertschke from the Leibniz Center for European Economic Research criticized the subsidies as an immense sum [4].
Intel CEO Lip-Bu Tan said the company would only expand capacities if there was enough customer demand. Tan is pursuing austerity measures and cutting jobs worldwide, with the number of employees expected to drop to around 75,000 by the end of the year [4].
Commissioner for Eastern Germany Kaiser emphasized that Intel's decision was an entrepreneurial decision, not a general rejection of the location [4]. The city of Magdeburg and the Saxony-Anhalt state government are seeking a replacement for the project, with Magdeburg continuing to focus on attracting other high-tech companies [4].
Magdeburg remains a promising location for further development, offering immense potential for the state [4]. The new coalition of black and red in the federal government sees it similarly and speaks of incentives for more chip production and at least three new factories in Germany [4].
As the search for a replacement continues, Eastern Germany remains an important cluster for global semiconductor production, and the federal government continues to promote this development.
Despite Intel's cancellation of the semiconductor factory in Magdeburg, worth 30 billion euros, the state of Saxony-Anhalt and Germany are actively seeking a replacement for the lost investment.
The German government's aim to establish semiconductor facilities, as indicated by the "Hightech-Agenda" and the new federal government's interest in incentivizing more chip production, reflects the potential of Magdeburg for further development.
