American microchip and semiconductor company Intel (INTC) plans to spend $33 billion U.S. to build two new chip fabrication plants in Germany.
German Chancellor Olaf Scholz called the two new microchip plants, which will be based in Magdeburg outside of Berlin, the largest foreign investment in Germany’s history.
The German government is providing Intel with subsidies worth nearly $11 billion U.S. to help build the two chip plants in the European country.
News of the German expansion comes as Intel invests billions to develop factories all over the world as it seeks to restore its dominance in chipmaking and looks to fabricate chips and semiconductors for third parties.
The deal in Germany marks Intel's third big investment over the past week.
On June 16, the company announced a $4.6 billion U.S. chip plant in Poland. On June 18, Israel said that Intel would spend $25 billion U.S. on a factory in its country.
Globally, semiconductor manufacturing is expected to become a trillion-dollar industry by 2030, up from $600 billion U.S. in 2021, according to consulting firm McKinsey & Co.
Germany is spending billions on subsidies as it tries to attract technology companies amid growing concerns about dependence on South Korea and Taiwan for microchips.
The first chip plant in Magdeburg is expected to be operational within five years. About 7,000 construction jobs will be created plus around 3,000 high-tech jobs at the Intel facility.
Intel has also announced plans to build chip complexes in Ireland and France.
The stock of Intel is down 4% over the last 12 months at $36.37 U.S. per share.
