Intel and the German authorities had initially agreed on a subsidy of €6.8 billion to convince the American company to set up a chip manufacturing plant in Magdeburg. But when Intel upped its demands to almost €10 billion under the guise of inflation, the German leaders initially refused to budge… before apparently giving in. It is hard to know whether this is a real stand-off, or whether the German political class is merely pretending to resist in order to save face with its taxpayers at a time when Germany has fallen into recession.
As we have already indicated in the past, there is no question of stigmatising Intel’s behaviour in particular: all major industrial companies, and semiconductor manufacturers are no exception, engage in this kind of blackmail. Intel, by virtue of its size, is simply the most visible in the chip industry, and one of the most outspoken in these matters. Everyone (starting with small businesses) will have their own opinion about these multinationals which on the one hand make huge profits and regularly buy back their own shares to maximise their shareholders’ dividends, and on the other hand twist the arm of local politicians to finance their factories rather than relying on their own money and that which the banks would not fail to lend them. However, it seems legitimate to wonder about the real interest of these bargains for the public authorities.

€1 million per employee

Let’s stay with the example of Intel in Magdeburg. The first argument put forward concerns employment. It is envisaged that the site will eventually employ 10,000 people : that’s no mean feat (assuming that these are German jobs being created rather than relocations, and without counting the indirect jobs created). But with a bill of €10 billion for German taxpayers, the public cost still comes to €1 million per employee : that’s not nothing either. Second argument : the installation of a state-of-the-art integrated circuit manufacturing plant fills a gap in Europe. This is absolutely true, but as the German car manufacturers have pointed out, the Old Continent’s electronics needs are not at all geared towards these ultra-fine geometry chips, which are used only in processors for computers, servers and smartphones mostly manufactured in Asia.
Which brings us to the third argument: sovereignty, a concept that has come back into fashion because of the global rise of nationalism, but which also acts as a magical thought to justify everything and its opposite. How does the production of Intel chips in Germany really strengthen German or European sovereignty? Can one imagine Ursula von der Leyen calling Pat Gelsinger the next time there is a shortage of semi-conductors to demand that the Magdeburg site be re-equipped with mature technologies to produce chips that meet European needs ? Can one imagine this factory responding to orders from Brussels or Berlin when it comes to limiting exports of this or that chip to this or that country, rather than to orders from Washington? Can one imagine the Magdeburg plant organising open days to share its production secrets with all the European microelectronics players ? This is a genuine question : what sovereignty are we talking about here ?