back to article Intel to get $7.3b for Germany fab site as TSMC dismisses Europe plans

Intel is reportedly set to receive €6.8 billion ($7.3 billion) in subsidies for a massive chip manufacturing campus it's planning in Germany, and the x86 giant apparently won't have to worry about foundry rival TSMC setting up shop anywhere nearby for the time being. The German subsidies for Intel's planned fab site in …

  1. elsergiovolador Silver badge

    40nm?

    That's great if they will be making chips. But a chip is as good as a coaster or a back scratcher (if it has pins) if you don't have all supporting components.

    And there is a great shortage of microcontrollers that don't need a fancy 5nm fab. They are made using 40nm and older processes.

    Many smaller businesses had to close because they just can't get parts for their products and the bigger corporations even resort to buying home appliances to strip them off components.

  2. Platinum blond(e)

    Long range vs smash n grab

    TSMC's comments suggest they have the long view firmly in their sights. No supply chains in Europe which meet their needs *, and no big consumers (e.g., contract manufacturing houses) of the parts they ship. So even if they set up shop it would take many billions of euros more to keep from shipping the products halfway around the word to make finished goods. And then ship them back to end consumers. So with higher European labor costs to make things, and shipping stuff to and fro, this model is unsustainable once the subsidies run out.

    Intel OTOH is selling the Field of Dreams story, both to Europe and the USA. And quite likely to themselves.

    *: with the exception of ASML of course.

    1. Platinum blond(e)

      Re: Long range vs smash n grab

      Thumbs down without reply/rebuttal dont mean much to me. <shrug>

    2. elsergiovolador Silver badge

      Re: Long range vs smash n grab

      I think it's more about national security of Taiwan. If they build fabs capable of what they do on the island in Europe, then the West will have fewer reasons to defend them had China decided to launch a full scale attack.

      1. Platinum blond(e)

        Re: Long range vs smash n grab

        Fair point! May we explore this a moment more?

        If TSMC chose to build fabs in Europe, the Community would be even more interested in Taiwan's security at least until those fabs and required supply chains are producing products there. This could be 3 to 5 years, more if the supply chains depend on TSMC's expertise. So they could have increased protection (if you can call it that) and some subsidies to help.

        If Taiwan were seriously concerned about an imminent threat, it seems to me they would work a deal. They aren't making the short term play.

        This could be an early bluff while all await the river card. But I still think they're playing a longer game.

        1. El Bard

          Re: Long range vs smash n grab

          It might even be that Taiwan (government) and TSMC have potentially different interests in the long run. It is debatable whether TSMC would suffer from any sort of development; they think about revenue and shareholders, not matters of principle. They are a golden goose to everyone involved.

    3. Schultz
      WTF?

      Smash n grab

      Brings up memories of the last big subsidy grab-and-run operation of Intel and partners in Germany. Back then, a foundry was a paltry billion and a consortium decided to take the billion (why not) and see where the money leads them. Didn't lead anywhere, but it's only taxpayer's money.

      I am quite suspicious about attracting investments with large subsidies. You distort the risk/reward calculation with too much money, you'll end up with very risky investments (i.e., investments that probably will not work out). That's Capitalism 1-01. But then, there will be a lot of great photo-ops for the brave politicians before that investment bites the dust. That's the beauty of building billion-dollar infrastructure: it takes so long that only historians can remember the responsible parties by the time it bites the dust.

    4. Potemkine! Silver badge

      Re: Long range vs smash n grab

      Shipping costs have exploded and they will continue to grow in the future. Moving things will become less and less profitable.

      EU is among the first three biggest economies in the World. There are plenty of customers here.

      1. NeilPost Silver badge

        Re: Long range vs smash n grab

        Plenty of consumers yes… for retail boxed output.

        Not so many on the manufacturing supply chain of servers, laptops, tablets, phones, graphics cards, motherboards etc.

        Most of the EU IT/technology/consumer electronics manufacturing shut up shop and relocated to the far east quite some time ago… causing the now self-evident security of supply/manufacture - highlighted by Covid, Ever Given/Suez and Ukraine.

  3. Yet Another Anonymous coward Silver badge

    Good value?

    €7Bn cash and I assume they are not going to be paying business rates / property tax (whatever they have in Germany) and they won't make any profit cos a fab is a cost.

    Around 4500 people work at Intel's fab campus in Ireland (also a 300mm 7nm) so Germany is looking at paying close to €2M/job

    The only return is the employee income tax + anything they spend in the local economy. But if these are highly qualified semiconductor engineers they presumably already have well paid jobs somewhere else. How many semiconductor PhDs do these fabs employ vs lower paid assembly line workers?

    There will be a bunch of construction worker jobs for 6months - pity they can't hire cheap Geordies now we aren't in the Eu

  4. Potemkine! Silver badge
    Mushroom

    Subsidies

    Intel blackmails government to get taxpayers' money.

    Intel had a net income of $8.1bn in the first quarter of 2022 only. Intel has plenty of money, but thanks to its dominant position and its strategic production it diverts taxpayers' money into the hands of shareholders. It's a stick-up without a gun.

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