There is no question that the fact that Magdeburg is ahead in the Europe-wide competition for the location of the new plant of the US chip company Intel is a great success for the location.

If only it could give one of the economically weakest federal states the prospect of becoming one of the modern, important and prosperous industrial locations in Europe in the foreseeable future.

But with winning the tender, the work really begins - and it's tough.

Within weeks, a number of bureaucratic hurdles that should not be underestimated have to be cleared, planning procedures started and approval processes completed, for which the relevant administrations previously needed months, if not years.

In addition, conservationists have already made it clear that they intend to throw every stone in Intel's path.

Their goal: to delay or even block the start of construction of the first two factories of the new plant, which will cost 17 billion euros.

And these are not the only obstacles that need to be jumped over as quickly as possible.

At the European level, the Brussels Commission's “Chips Act” presented in February has still not been approved by the European Parliament and the European Council.

However, this regulation is crucial, as it is intended to shorten the tortuous paths through local offices and to relax the existing EU regulations for awarding billions in aid in order to lure semiconductor companies from all over the world to Europe.

planned economy manner

However, this framework is controversial in terms of regulatory policy.

It gives the industry detailed sales, turnover and technology targets in a planned economy manner.

In times of crisis, the Commission also reserves massive rights to intervene in the distribution of resources, in market activities and even in the management of companies.

In addition, Brussels is promising potential investors money that it doesn't even have.

Only a quarter of the announced aid totaling 5 billion euros comes from the coffers of the EU.

The rest of the sum comes from the budgets of the member states.

Amounts of around 33 billion euros have long been reserved there, but have not yet been paid out due to the EU state aid guidelines that are still in force.

For example, the federal government made it clear that it wanted to give Intel a big helping hand and subsidize the company's commitment in Magdeburg with subsidies of up to a third of the total investment.

But as long as Brussels' Chips Act does not have the approval of the EU Parliament and the EU Council, Berlin cannot keep its promise.

No work without grants

This could become a problem.

Because Intel is already counting on subsidies of 5 to 6 billion euros from the German tax coffers for its targeted investment in the heart of Germany.

Without these subsidies, according to the Group Board of Management, there will be no plant outside the gates of Magdeburg.

Intel wants to see the first two new factories in four years.

That is an ambitious goal even in normal times;

in times of pandemic and war, broken supply chains, rising prices and scarce resources, this plan is downright bold.

Unlike the Californian car manufacturer Tesla in neighboring Brandenburg, Intel says it does not want to take any entrepreneurial risks in Saxony-Anhalt and will start construction before the necessary official permits have been obtained.

Intel's CEO Pat Gelsinger is a soft-spoken man, despite his penchant for making big appearances.

Unlike Tesla's robust boss Elon Musk, Gelsinger seeks an understanding with environmentalists through negotiations.

Unlike Musk, who is entrepreneurially active in several sectors, Gelsinger has only one goal: He wants to make Intel the industry leader in the chip industry again.

For this he invests billions, for this he wants to build the most modern chip plants in the world, and for this he goes to Magdeburg.

The city has a lot to offer: It is located between Wolfsburg and Berlin, less than two and a half hours by car from Dresden, Europe's most important chip location to date, and one hour from Saxony's car factories, the major potential customers for Intel chips.

Magdeburg also has a veritable university, numerous top-level research institutes and a state government that is willing to really work hard for investors – by any means necessary.

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