Magdeburg seeks alternative financial backers following Intel dissent
In Eastern Germany, one of the world's most significant hubs for semiconductor production, the federal government is determined to boost this sector's growth. However, a recent development has cast a shadow over the region, as Intel has definitively abandoned its planned chip production project in Magdeburg, Germany, leaving a gap without an announced successor.
The multibillion-euro project, initially postponed in 2022, was expected to create 3,000 jobs and had received pledges of around 10 billion euros in subsidies from the German government. The project was a key part of the European semiconductor autonomy strategy.
As of July 2025, no companies are publicly known or reported as aiming to replace Intel's Magdeburg chip production project. The shutdown is part of broader chip industry challenges and Intel's global cost-cutting measures, involving layoffs and consolidation elsewhere, with no announced plans by others to move into Magdeburg's site.
The city of Magdeburg intends to buy back the land previously sold to Intel and offer it again on the international market. There are already inquiries from notable companies for the planned high-tech park on the Intel site.
Elisabeth Kaiser, Federal Commissioner for Eastern Germany, emphasizes that Intel's departure is a business decision, not a rejection of the location. She remains confident that Eastern Germany will remain a significant location for semiconductor production.
Meanwhile, the focus in Magdeburg will remain on attracting other high-tech companies. The available spaces in the industrial park offer immense potential for the further development of Saxony-Anhalt. Lydia Huskens, deputy of Minister President Haseloff, advocates for developing the entire industrial park and building necessary infrastructure, rather than relying solely on Intel.
In a related development, the company FMC recently announced a factory for memory chips in the new industrial park in Magdeburg. New chip factories are also being built in Dresden.
The cancellation of the Intel project has been met with disappointment, particularly in Saxony-Anhalt. Minister President Haseloff views the departure as a significant setback for Saxony-Anhalt and the European Union, but notes that clarity has now been established. Saxony-Anhalt is hoping for a replacement for the multi-billion project.
The amount of the subsidies for the Intel project had been criticized. If settlements are supported by tax money, it must be ensured that they are long-term and not "wasted" if the subsidized company goes bankrupt or moves on. Intel's CEO, Lip-Bu Tan, is pursuing austerity measures and cutting jobs, with the company expected to cut jobs worldwide, with the number of employees expected to drop to around 75,000 by the end of the year, down from nearly 109,000 at the end of 2024.
The new coalition of black and red in the federal government shares similar views, speaking of incentives for more chip production and at least three new factories in Germany. The federal government aims to further promote the development of semiconductor production in Eastern Germany.
- The cancellation of Intel's chip production project in Magdeburg has left a gap without an announced successor, highlighting the need for other high-tech companies to step in and invest in the region to continue the growth of the semiconductor sector.
- Despite Intel's departure, technology giants are showing interest in the high-tech park planned on the Intel site in Magdeburg, providing potential for the further development of Saxony-Anhalt and the development of new chip factories.