Berlin to sign agreement with Intel after chip plant talks

Intel has reportedly asked for subsidies worth 10 billion euros from Germany, where the cost for energy and labour is high. Intel CEO Pat Gelsinger told Reuters on Friday that the gap between what Germany had offered and what Intel needed was too big but he expected to reach an agreement.

The German government and Intel are expected to ink a deal over the U.S. chipmaker's planned 17 billion euro ($18.6 billion) plant in Dresden, capping months of talks over subsidies needed for the project. Intel has reportedly asked for subsidies worth 10 billion euros from Germany, where the cost for energy and labour is high.

Intel CEO Pat Gelsinger told Reuters on Friday that the gap between what Germany had offered and what Intel needed was too big but he expected to reach an agreement. Intel declined to comment on the subsidy amount.

Germany has scheduled the signing of an agreement with Intel for 1245 GMT on Monday and both Chancellor Olaf Scholz and Intel's Gelsinger will be present for the ceremony, the chancellery said in a statement. The German government has not confirmed how much state funding the company is set to receive for the project in the central German city of Magdeburg.

The Handelsblatt business daily reported last week that the U.S. company would get 9.9 billion euros ($10.84 billion), up from a previously promised 6.8 billion. Scholz's government is investing billions of euros in subsidies to lure tech companies to Germany. This comes at a time of growing alarm over supply chain fragility and dependence on South Korea and Taiwan for chips.

($1 = 0.9150 euros)