On Monday, Intel and the German government reached an agreement, with Intel committing to invest over 30 billion euros ($32.8 billion) in establishing a chip manufacturing site in the eastern city of Magdeburg. The German government pledged to cover one-third of the required investment.

The deal was announced as German Chancellor Olaf Scholz held a meeting with Intel CEO Pat Gelsinger in Berlin, the Associated Press reported.

Intel had already acquired the land for two semiconductor facilities in Magdeburg in November. The company anticipates that the first facility will commence production within the next four to five years.

According to Economy Minister Robert Habeck, who is also Germany’s vice chancellor, this investment by Intel signifies a significant expansion of their production capacity in Europe and stands as the largest-ever investment made by a foreign company in Germany.

Prior to the signing of the revised letter of intent on Monday, the initial plans called for a minimum investment of 17 billion euros.

The German government has now confirmed that it will contribute 9.9 billion euros towards the total investment.

Written by staff