Citing the need to evaluate the “framework conditions,” “potential schedules” and “adapt to market needs,” Intel Corp. and the Saxony-Anhalt state of Germany are postponing its Magdeburg double fab investment and will revisit the topic in two years.
According to a report from German news outlet HardwareLuxx, both parties confirmed they are still interested in the project, but the German state understands that the American chipmakers are struggling currently.
The fab in Magdeburg, announced back in 2022, would be the most advanced Intel fab, purportedly manufacturing 1.5 nm semiconductors by 2027. Intel became a land owner in November of 2022 in Germany that would serve as the fab location. However, due to the financial woes, Intel moved back the fab launch to 2030.
Now, Intel said it would re-evaluate the feasibility of the site in 2026, meaning it has yet to cancel the project entirely.
However, this means Intel won’t receive the €10 billion subsidy from the German government and is unclear if future subsidies would be available if the project is renewed.
AMD layoffs
Meanwhile, AMD said it would lay off 4% of its staff to align resources to grow opportunities after following mixed earnings results. It is unclear what these opportunities are and what it will focus on. However, the company has been ramping up its support for artificial intelligence, much like many other companies, and is likely to continue this path as PCs move toward incorporating generative AI in these computers.
Layoffs from both major American chipmakers, both focusing on data centers, desktop and laptop computers and servers, is concerning on several levels. Not surprisingly, there is already rumors that both companies may merge to solidify the market and continue the growth in U.S. domestic semiconductor manufacturing as part of the CHIPS and Science Act.
Why it matters
The postponing of the Magdeburg fab continues Intel’s financial issues. In August, the company announced it would lay off about 15,000 employees along with additional benefit reductions and cuts to expenses. This was around the same time Intel said it was pausing fab projects in Ohio due to economic downturns and delays in U.S. subsidies.
There have been several rumors about Intel since the beginning of its financial issues like the possibility of Samsung merging its foundry operations with Intel. Another report said that Qualcomm was interested in potentially buying the company or parts of the company, perhaps even its foundry services.
