More Subsidies, More Investment - Germany Tells Intel For €17B Chip Plant - Intel (NASDAQ:INTC)

Germany is compelling Intel Corp INTC to boost its plans for a landmark €17 billion chip plant in exchange for higher subsidies marking the country's most significant foreign direct investment since the second world war.
Intel will likely receive €6.8 billion in subsidies from Berlin to build its manufacturing plant in the eastern city of Magdeburg, the Financial Times reports.
Reportedly Intel wanted at least €10 billion in subsidies citing higher energy and construction costs. But German officials pitched for more increased investment to claim the higher contributions.
Also Read: China Puts Pressure on Intel as US Sanctions Loom, Seeks Intel's Support for Preserving Global Supply Chain
Russia's decision to cut gas exports to Europe after its invasion of Ukraine and high inflation prompted Intel to request more subsidies.
However, additional capex for Intel would put financial pressure on the company at a critical time which recently shared plans to moderate capital spending after an unexpected slump in sales forced it to slash its dividend to save cash.
The U.S. Chips Act has pressured the EU to match such efforts or lose to America.
The venture is pivotal to EU ambitions to double its share of the global semiconductor market from less than 10% today to 20% by 2030 and reduce dependence on Asian suppliers for advanced chips catering to smartphones to electric vehicles.
Price Action: INTC shares traded lower by 1.02% at $32.02 on the last check Thursday.

More Subsidies, More Investment - Germany Tells Intel For €17B Chip Plant