Intel's German Plant Delay Sparks Economic Debate

Intel has delayed its plan to build plants in Germany for two years, leading to a budget dispute within the German government. Chancellor Olaf Scholz and Economy Minister Robert Habeck remain committed to Germany's semiconductor industry, while economists suggest reallocating funds for tax reforms.

German Chancellor Olaf Scholz confirmed on Tuesday that U.S. chipmaker Intel remains committed to its $7 billion plan to build plants in eastern Germany despite a two-year construction delay due to cost-cutting measures.

Scholz, speaking in Astana, emphasized the importance of this opportunity to expand Germany's semiconductor industry amid a volatile market, despite the postponement. Intel CEO Pat Gelsinger had outlined the delay in a memo, indicating it was a corporate policy decision.

The postponement has sparked a budget dispute within Germany's coalition government. The finance ministry proposed reallocating unused funds, while the economy ministry pushed back. Economists weighed in, suggesting investment in tax reforms instead.

(With inputs from agencies.)