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German court ruling 'could cost Intel billions'

A decision to cancel German government funding of climate-related projects is threatening Intel's plans to build manufacturing plants in Saxony-Anhalt.

Last week, a German court decided that billions of euros of aid to finance the government's Climate and Transformation Fund (KTF) contravened Germany's constitution. This has led to fears that the ruling will jeopardise the country's semiconductor subsidies policy.

This will certainly alarm Intel. In June, the government agreed subsidies worth nearly EU 10 billion to fund Intel's new plants in Magdeburg.

Shortly after the legal ruling, a German government spokesperson said it will stand by its commitment to Intel. But now Reuters has posted a story that reflects a more concerned tone.

"When Germany cannot afford such future projects like Intel anymore, then the economic damage will be enormous and the image damage gigantic," Sven Schulze, economy minister of Saxony-Anhalt was quoted as saying.

The legal about-turn might also threaten other investments such as TSMC's plans for a Dresden fab.


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