Intel has suspended the planned construction of factories in Germany and Poland, citing a drop in demand for its products.
The U.S. chipmaker was expected to receive considerable financial incentives from both Berlin and Warsaw to relocate its manufacturing.
Production complexes were due to be constructed in the German city of Magdeburg in Saxony-Anhalt, and in Poland near Wroclaw.
“We will suspend our projects in Poland and Germany for approximately two years due to expected market demand,” Intel CEO Pat Gelsinger said.
Instead, the tech giant’s European manufacturing hub will remain in Ireland for the time being, bolstered recently by a new €17 billion investment at its Leixlip site in Co Kildare.
However, even here costs are being cut with voluntary redundancy packages being offered to up to 4,000 employees. The company is aiming to cut 15 percent of its workforce in Ireland through the scheme, which will shift to compulsory redundancy should this target not be met.
German subsidies for the construction of a manufacturing plant had been expected to be in the region of €10 billion while Warsaw had set aside $1.8 billion for a semiconductor factory near Wroclaw.
The state aid was only recently approved by the European Commission but has now been kicked into the long grass.
