Magdeburg has a long history, a cathedral, a Hundertwasser house, a top handball team and the Elbe.

It does not have an ICE connection.

That should change soon.

The announcement by the Californian chip manufacturer Intel that it intends to build several chip factories in the state capital of Saxony-Anhalt not only places the city at the center of European industrial policy, it also puts it on the high-tech world map.

Stephen Finsterbusch

Editor in Business.

  • Follow I follow

As a first step, the Americans want to set up two modern semiconductor plants on the Elbe.

Six to eight more works are to follow later.

Intel's CEO Pat Gelsinger puts the investment sum for the first step at 17 billion euros.

He rates his commitment as so important that he has both hands open in the context of the EU Chips Act, which was only introduced in February and is intended to lower bureaucratic hurdles and make massive state subsidies possible.

When the aid will flow

However, the procedure is complex: Intel has to determine its need for aid and register it in Berlin.

The application is checked there and sent to Brussels.

Brussels then examines the amounts requested again.

If approved, the application goes back to Berlin, and there the subsidy tap for Intel can finally be turned on.

How much money Gelsinger can expect is currently “being worked out and announced in due course”, as he said last week.

Behind the scenes it is said that there are currently only rough guidelines.

These are based on what pioneering semiconductor nations like South Korea and Taiwan paid in subsidies for new mega plants: 30 to 40 percent.

For the first two Magdeburg factories, that would be five to seven billion euros.

Intel would like to start construction immediately.

But Berlin first refers to Brussels and Brussels to the EU Chips Act.

But he has not yet cleared all political hurdles.

The new factories in Magdeburg are supposed to be producing as early as 2027, as EU Commissioner Thierry Breton has already set the goals of manufacturing state-of-the-art chips in Europe by 2030 and increasing the local share of sales in the global semiconductor market from the current 10 to 20 percent.

On the way there not only Intel plays a role.

European chip manufacturers such as Infineon, Bosch, NXP and GF are also important.

They too have ambitious growth and investment plans.

They are also working on new chips and are looking forward to Berlin with great expectations.

However, they do so with increasing impatience.

Because as part of a so-called Important Project of Common European Interest (Ipcei), a kind of state-funded special program for the further development of high technology in Europe, they have been waiting for months for their registered projects to start.

Berlin has not yet given the green light

Like Intel's mega-investment, these projects should bring the European chip industry back to the top of the world.

Like Intel, those involved are therefore stepping up the pace.

But in the complicated approval and subsidy procedures, they are not making any headway in Berlin.

Some people in the industry are surprised at the astonishing bureaucratic flexibility that a project like Intel's in Magdeburg seems to have.