“Intel suspends for two years its key investments in Europe – including construction of a factory in Poland – due to the company's global financial problems. I was informed about this by Pat Gelsinger, the head of Intel” – wrote the Minister of Digital Affairs on Monday evening Krzysztof Gawkowski.
Gawkowski informs about Intel's decision. Morawiecki attacks
“For the past few months, we have been working on preparing strategic semiconductor investments. Last week, we received the green light from the European Commission to submit an application for state aid for Intel. This experience allows us to efficiently implement similar projects and we will work on this in the future,” the minister added on the X platform.
Poland has obtained the consent of the European Commission to support the construction of a chip factory in Miękinia near Wrocław, which was to reach up to PLN 7.5 billion, or over 41 percent of the investment worth PLN 18 billion. In the budget for 2025, PLN 2.7 billion was reserved for support for the Intel project. “Until the last moment, they boasted that they were working on the Intel investment. Today, they are withdrawing under the cover of darkness. Only Poland is a pity,” commented the former Prime Minister Mateusz Morawiecki.
Intel's Poor Financial Results: Giant in Trouble
The fact is, however, that it was not the Polish government that withdrew the investment “under cover of darkness”. This is, among other things, a side effect of the decision taken by Intel a breakthrough decision an American company that divided his business. The case is described in detail on Next.gazeta.pl by Daniel Maikowski in the text entitled “This is why there will be no Intel factory in Poland. Tusk's fault? Not this time”.
In the background is Intel's new strategy, which assumes rebuilding the business model. Forced largely by the company's financial situation. “It is absolutely not our fault that Intel withdrew (although it claims that it has withheld) from this investment. This is the result of the huge problems that the company is going through,” assesses Tomasz Smolarek, investment advisor. In short: Intel has run into financial trouble. “Intel shows an operating margin of less than -40 percent on Production! Minus. In the results for Q1 2024, it is already -57 percent, which gives PLN 2.5 billion. USD losses in a quarter! This business cannot continue like this. This is not profitability at which one can think about expansion,” the expert said.
– Our financial results in the second quarter were disappointing – said Intel CEO Pat Gelsinger in early August, announcing a 15 percent reduction in employment.
Intel Gets $3 Billion in U.S. Funding: “It's a Clear Signal”
It is worth looking at the timing. Krzysztof Gawkowski provided information about Intel on Monday at 10 p.m. with minutes. It was almost exactly the same time that Intel provided financial information on its website. And there was also a one-sentence information that they were suspending the project of building factories in Poland and Germany for two years. There are also many more interesting facts here. It is worth noting that Intel states that it will continue to develop its investments in the United States. It received 3 billion dollars in funding from the US government under the CHIPS and Science Act for the 'Secure Enclave' program. This is a large US project concerning, among other things, supporting the semiconductor industry. All this is clearly a signal that external investments in this area are less important for the United States
– comments journalist Sylwia Czubkowska, co-author of the Techstorie podcast, for Next.gazeta.pl.
He adds that jobs and know-how are of course important in the case of Poland, but there is another very important issue.
This is a safety element, because places where there are large productions in the semiconductor chain get a protective umbrella. Everyone wants this supply chain not to be broken
– she emphasizes. In her opinion, therefore, a very important element of this “unfulfilled investment by Intel is that Poland is moving this next safety fuse in the international system in time”. Sylwia Czubkowska adds that the key in this case is questionwhich the Polish government should have asked Intel earlier: “You may not be in a dying state, but you got a good one attack hearts and are you able to implement what we have agreed on?”
Ministry of Digital Affairs: Talks involving Intel were still ongoing last week
Next.gazeta.pl asked Ministry of Digital Affairs about what's next after Intel's decision. What plans does the Polish government have in the face of this unexpected change?
“We allow for the possibility of resuming Intel's investment. If Intel is ready to resume investment – we will start talks. At this point, filing an application for public aid for Intel is pointless. We are aware that two years on this market is a long time. and a lot can happen during this time. If we establish cooperation with another investor, we will implement it” – the Ministry of Digital Affairs informed Next.gazeta.pl.
“There will be a meeting soon semiconductor investment team meetingwhere the next steps will be analyzed. The intention is to attract new semiconductor investments to Poland. We have already processed all formal solutions related to public aid – further initiatives of this type will certainly proceed smoothly. On our side, we have done everything in this respect and we have received from the EC informationthat we can submit a public aid notification. Discussions on this matter with the participation of Intel representatives They were still going on last week” – adds the ministry.
“The game for processors continues in Europe”
The game for processors is ongoing in Europe. It is worth remembering that, in addition to the factory in Poland, Intel's decision also concerns the main factory in Europe, in Magdeburg. And Germany is also very upset about it. The coalition there is even arguing about it. What attracts and attracted both Intel and TSMC to Europe, the desire to diversify the supply chain, is a structural trend that will stay with us. Intel is temporarily out of it
– Jakub Jakóbowski, deputy director of the Centre for Eastern Studies, comments in an interview with Next.gazeta.pl. He emphasizes that the American company's factory would undoubtedly be a “qualitative leap” for Poland.
– From my point of view, we need to ask ourselves what these investments are supposed to lead us to and what position we see for ourselves in this global supply chain. The accompanying investments that Intel planned, i.e. entering the supply chain of a much larger plant, is in my opinion a goal that we can afford. I have often discussed this topic with the Taiwanese, all specialists say that there is no potential for these largest, huge factories in the whole of Central Europe – in Poland, the Czech Republic, Lithuania, which was also interested in semiconductors – – he adds. He reminds us that such plants “require a huge energy expenditure, huge demand for engineers and huge demand for water”. That is why, among other things, they were located in Germany. – Germany has a tradition of creating processors in Dresden. There are many other companies of this type there, also European ones – says Jakub Jakóbowski.
OSW Deputy Director: We Should Start Learning How to Make Processors
In what direction should Poland go after Intel's decision? – The most reasonable thing to do is to look for niches within this supply chain, because in order to manufacture processors, you have to design them, deliver various chemical or silicon components necessary for production. Finally, you have to pack them, test them, it is an extremely complex, huge supply chain. My perspective is that it is best to measure intentions by strength and try to find niches in which we, as Poland, could start learning how to make processors – the expert assesses.
Because let's remember that we are starting from the level of a country that has not very advanced traditions. We train some microelectronics specialists, but we should really look for a foothold in the supply chain that would allow us to learn this business. Educate people, educate Polish companies that could grow on this and slowly scale this sector in Poland. This or that investment should rather bring us closer to such a goal, and not be a goal in itself. At the current stage of our development, we need to think about something more than just attracting investments, but rather about how it will serve the broader modernization of Polish industry and the industrial base.
– sums up.