Intel ( INTC -6.12% ) the stock is declining once more in Thursday’s trading session. As of 12:15 p.m. ET, the semiconductor company’s share price had decreased by 3.9%, based on information from S&P Global’s Financial Market Analysis and Insights .
There is growing worry about the prospects of Intel’s new chip manufacturing facility in Germany. DigiTimes and Fortune A magazine released individual articles today suggesting that there might be uncertainty regarding the construction of the manufacturing facility.
Intel’s plans for a manufacturing facility in Europe are causing concern among investors.
Intel is preparing to start building two new semiconductor production plants close to Magdeburg, Germany. These facilities will focus on producing high-performance chips. semiconductors and were anticipated to be operational and manufacturing chips by 2027. However, it appears that this schedule is now uncertain, and there is a possibility that the construction might be completely halted.
Under the European Chips Act, Intel was set to obtain government financing that would finance approximately $11 billion of the $33 billion needed to build new factories in Germany. However, due to significant cost-reduction strategies, there is concern among some investors and analysts that the semiconductor firm might decide to scrap these new facilities as part of its reorganization efforts.
Is Intel truly prepared to succeed in the semiconductor manufacturing industry?
Doubts surrounding Intel’s proposed construction of a new fabrication plant in Germany arise following recent announcements that the European Union has granted approval for funding a new facility to be developed by another company. Taiwan’s Semiconductor Production Company The new $11 billion plant began construction earlier this week, with the European Union contributing $5.5 billion in financial support.
Intel ranks as the third-largest chip producer globally, following TSMC and Samsung. While the company mainly utilizes its fabrication facilities to manufacture its own chip designs, offering fab services to third parties is an essential component of its growth plan. However, even with substantial subsidies from the U.S., the E.U., Israel, and other nations, there are significant uncertainties regarding its future in the fab market. Constructing and operating chip fabrication plants demand vast resources, and the move to expand contract fab services coincides with a period of business challenges and efforts to cut costs.
