Intel to invest $33B in two German chip plants

Intel will invest more than 30 billion euros ($33 billion) in Germany as part of its expansion push in Europe.

The U.S. chip maker will receive 10 billion euros in German subsidies toward the project, a person familiar with the matter said.

The deal in Germany is Intel’s third big investment in four days, following a $4.6 billion chip plant in Poland and a $25 billion factory in Israel.

Intel last year announced plans to build a 17 billion-euro chip complex in Magdeburg, Germany.

The company has now expanded its investment in the site and expects it to be more than 30 billion euros for two semiconductor facilities (known as fabs), Intel said in a statement on Monday.

Intel said the first facility is expected to enter production in four to five years following the European Commission’s approval of the incentive package. The Magdeburg site will serve Intel products and Intel Foundry Services customers.

“Building the ‘Silicon Junction’ in Magdeburg is a critical part of our strategy for Intel’s growth,” Intel CEO Pat Gelsinger said in the statement.

“Combined with last week’s announcement of our investment in Wroclaw, Poland, and the Ireland sites we already operate at scale, this creates a capacity corridor from wafers to complete packaged products that is unrivaled and a major step toward a balanced and resilient supply chain for Europe,” Gelsinger said.

Under Gelsinger, Intel has been investing billions in building factories across three continents to restore its dominance in chipmaking and better compete with rivals AMD, Nvidia and Samsung.

Both the U.S. and Europe are trying to lure big industrial players via a mix of state subsidies and favorable legislation, with Berlin concerned about losing appeal as a place to invest.

The German government is investing billions of euros in subsidies to lure tech companies to Germany amid growing alarm over supply chain fragility and dependence on South Korea and Taiwan for chips.

Berlin is currently also talking with Taiwan’s and Sweden’s electric vehicle battery maker Northvolt about setting up production in Germany, having already convinced Tesla to build its first European gigafactory there.

Reuters contributed to this report