According to press reports, Intel is seeking an increase of 10 billion euros in government support to build a large manufacturing plant in Magdeburg, Germany. However, it appears that the chipmaker will have to settle for the 6.8 billion euros it is already scheduled to receive.

German Finance Minister Christian Lindner told the Financial Times in an interview that he is against increasing the funding. 'There is no more budget.' The state is "now trying to consolidate, not expand, its budget."

Last year, Intel announced that it would build a €17 billion state-of-the-art chip manufacturing plant in Germany. Intel's plant will be the largest foreign investment in postwar Germany, where the EU aims to double its semiconductor market share by 2030 and reduce its dependence on foreign suppliers.

Lindner, a member of the Free Democratic Party, says he is "not a big fan of subsidies" and opposes any increase in financial support for Intel's facility. However, some within the German government do not agree with Lindner's views, and this has led to internal squabbling within the government over the preparation of next year's budget.

Chancellor Olaf Scholz said the Intel facility is a "high priority" for the government, adding that "subsidies are always borne by the taxpayer, so ...... must be carefully considered," he added.

An alternative proposal that has been floated is for the government to provide Intel with inexpensive power for its Magdeburg plant in exchange for additional funds, thereby lowering Intel's monthly facility costs.

As for further funding, the minister stated that the budget has "reached its limits."

Germany is not the only country where Intel is relying on government subsidies to build factories. In the U.S., Intel plans to receive more than $20 billion in subsidies and 25% tax credits (worth up to $24 billion in total) to build a large chip plant in Ohio.

Construction of the new chip plant is expected to begin later this year, with production expected to begin in 2027. Unless the German government finds more funding, Intel will likely have to pay the remaining 10 billion euros needed to build the plant.