€30 Billion Investment: Intel’s 1 nm German Factory Delayed Due to Black Soil and EU Subsidy Approval

EU Competition Authority has not yet approved the €9.9 billion subsidy for the €30 billion project, causing further delays.

Introduction

Intel’s ambitious plans to build a cutting-edge 1nm chip factory in Magdeburg, Germany, have hit a snag. Regulatory hurdles have challenged Intel’s plan to build a new €30 Billion chip factory in Germany. Environmental groups, concerned about the factory’s water usage and potential impact on local water supplies, have reportedly opposed the facility, which aims to produce Intel’s next-generation 1nm chips.

Source: intel

The German government is reportedly considering these concerns as it decides whether to approve the project. Intel has said that the factory would create jobs and boost the European chip industry, but environmental groups have argued that the project’s benefits do not outweigh its environmental costs.

Project: Intel Mega-fabs in Magdeburg, Germany

Investment: €30 billion (around $32.8 billion) with a subsidy of $9.9 billion

Technology: Intel’s Angstrom era technology (leading edge)

Status:

  • Announced in June 2023 with land acquisition completed in November 2022
  • Expected to be operational in 4-5 years after funding approval
  • Facing no major public mention of regulatory hurdles related to cost

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The Promise of Intel’s 1nm factory

Intel has delayed the construction of its Fab 29 modules 1 and 2 near Magdeburg, Germany, due to pending EU subsidy approval and the need to relocate black soil to another site, according to a report by Volksstimme.

The new timeline now schedules the start of construction for May 2025. If Intel expedites construction and tool installation, the fab could still become operational around late 2027 to early 2028. However, this delay poses potential challenges for the company.

Germany’s Finance Minister Michael Richter intervened to secure the necessary support for Intel after subsidy delays pushed the original construction start from the first half of 2023 to summer 2024.

Despite this, the EU Competition Authority has not yet approved the €9.9 billion subsidy for the €30 billion project, causing further delays.

Consequently, the removal of topsoil has been rescheduled for May 2025. In response, the state and Intel are adjusting their plans, focusing on infrastructure development and land acquisition to prepare for the delayed construction start.

Why the Delay in Intel’s 1nm factory

Source: intel

The future construction site contains high-quality black soil that must be carefully removed and reused, as required by law. The state will handle the removal of the top 40 centimeters of soil, amounting to 80,000 truckloads, while Intel is responsible for removing any additional soil beyond this depth. This process is crucial for compliance with environmental and building regulations.

Infrastructure development is also a significant part of the project. The city of Magdeburg will build an access road from the B 81 to the Intel site by July 2024. Following this, the state will construct the main access road between Magdeburg and Wanzleben, starting in August 2024, with completion expected by April 2025. This will facilitate the transport of soil and construction materials.

Land acquisition is ongoing, with the state-owned development company High Tech Park (HTP) purchasing 450 hectares for supplier settlements. Most landowners are willing to sell, and the state is offering €25 per square meter, significantly above the typical agricultural price.

The state has scheduled a public hearing on the plans for May 29 to address 13 objections from associations, private individuals, and the municipality of Burgstall. Officials remain optimistic that the project will proceed smoothly once the EU grants approval.

Intel’s 1.4 nm and 1 nm node factory:

Intel originally scheduled Fab 29.1 and Fab 29.2 to begin operations in late 2027, targeting specific fabrication processes such as Intel’s 14A (1.4nm) and 10A (1nm) nodes. These technologies are essential for producing particular products in Intel’s roadmap.

Typically, Intel launches new products for client PCs in the second half of the year and ramps up production in the first half. Thus, Intel intended Fab 29.1 and Fab 29.2 to manufacture client PC products for a second-half 2028 launch.

While Intel could still ramp up the fab if it’s ready by mid-2028, the schedule will be tight. However, the report paints a more concerning picture, stating that Intel now estimates it will take ‘four to five years to build the two factories,’ with production starting in 2029 – 2030.

Kumar Priyadarshi
Kumar Priyadarshi

Kumar Priyadarshi is a prominent figure in the world of technology and semiconductors. With a deep passion for innovation and a keen understanding of the intricacies of the semiconductor industry, Kumar has established himself as a thought leader and expert in the field. He is the founder of Techovedas, India’s first semiconductor and AI tech media company, where he shares insights, analysis, and trends related to the semiconductor and AI industries.

Kumar Joined IISER Pune after qualifying IIT-JEE in 2012. In his 5th year, he travelled to Singapore for his master’s thesis which yielded a Research Paper in ACS Nano. Kumar Joined Global Foundries as a process Engineer in Singapore working at 40 nm Process node. He couldn’t find joy working in the fab and moved to India. Working as a scientist at IIT Bombay as Senior Scientist, Kumar Led the team which built India’s 1st Memory Chip with Semiconductor Lab (SCL)

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