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Intel pulls the plug: Magdeburg chip factory burst!
The Chancellor meets with Macron as Intel abandons plans for chip factories in Germany. Current developments and challenges in German politics and economy.
Intel pulls the plug: Magdeburg chip factory burst!
In the last few months, the situation surrounding the planned chip factories in Germany has changed significantly. Intel has now finally given up plans for a large chip factory in Magdeburg and does not want to pursue an additional factory in Poland. This decision is no coincidence: the group suffered from massive financial difficulties for a long time and recently recorded sales stagnation of $12.9 billion. In the last quarter, Intel suffered a loss of $2.9 billion, after being $1.6 billion in the red the previous year. The new CEO Lip-Bu Tan has already announced that he will cut around a quarter of the approximately 100,000 jobs in order to improve the balance sheet. The majority of these layoffs were announced in July; the remaining reductions will occur through natural fluctuation and other measures. The investment for the factory in Saxony-Anhalt was originally estimated at around 30 billion euros, which was intended to create 3,000 new jobs. In 2023, the federal government had promised state aid of 9.9 billion euros, but the first construction measures were always delayed. The groundbreaking was initially planned for 2024, but now it looks as if the project is completely off the table.
Important role of semiconductors
Semiconductors are essential for modern industry. They are not only found in smartphones, but also in cars, washing machines and even weapon systems. Around every second semiconductor comes from Taiwan, which illustrates the dependence of German companies and the geopolitical explosiveness of the situation. A significant proportion, more than 80 percent, of German companies in the manufacturing sector and in ICT services rely on these critical components. The past few years have shown the vulnerability of supply chains: supply bottlenecks during the pandemic had a drastic impact on many industries. Geopolitical tensions also contribute to uncertainty regarding the reliability of semiconductor supplies, making initiatives to increase production capacity in Europe even more important.
But there are turbulent times not only in the tech sector. There is also a lot going on on the political stage. The federal government recently approved the export of Eurofighter fighter jets to Turkey. This is a hotly debated topic, as arms deliveries to Turkey are controversial due to the current human rights situation. Here the Turkish government has to decide whether it actually wants to order the aircraft. There is resistance in the Foreign Office to the federal government's current Israel policy. A group of around 130 young diplomats are calling for a more contemporary stance on this issue. They are of the opinion that Germany should also impose sanctions on Israel for violations of international law, while the SPD is already pushing ahead and demanding appropriate measures.
Political developments at a glance
In the midst of these discussions, talks are also taking place between German Chancellor Merz and French President Macron. Security and foreign policy issues are on the agenda. An agreement on the development of the new FCAS air combat system is being sought by the end of August, with both parties showing agreement on the need to respond to possible US tariffs. Merz and Macron have also expressed concern about the situation in the Gaza Strip and are calling for an immediate ceasefire.
The developments surrounding chip factories and arms exports show that many important decisions that can have far-reaching consequences must currently be made in Germany and beyond. It will be interesting to see what happens next.