Germany’s Scholz: Intel committed to German site despite delay

BERLIN (Reuters) – German Chancellor Olaf Scholz said on Tuesday that Intel (NASDAQ:INTC) is committed to its plan to build plants in eastern Germany despite the U.S. chipmaker’s announcement that it is delaying construction by two years amid cost-saving measures.

“The decision to postpone the project in Germany for two years is a decision that also includes the intention to stick with it,” Scholz said.

“It is important for us that we take this opportunity in this very volatile business of the semiconductor industry to help ensure that there is nevertheless a further expansion of the already profound capacities in Germany,” he said.

Intel CEO Pat Gelsinger released a memo to employees on Monday outlining a number of steps the company would take to revive itself, which included pausing construction at its project in Germany for two years.

“This is now a purely business decision that has to do with corporate policy,” said German Economy Minister Robert Habeck on Tuesday, adding that Germany was still committed to building up semiconductor production in Europe.

Habeck’s ministry said in a statement that it was “now up to Intel to quickly get back on a path that enables investment.”

The decision by Intel also triggered a new budget dispute within Germany’s ruling coalition, with the finance ministry saying funds no longer needed for Intel subsidies should be used to balance the books and the economy ministry pushing back.