American technology company Intel announced on Thursday that it is withdrawing from announced investments in Poland and Germany. Intel had planned to open a semiconductor factory near Wrocław.
The company released its second-quarter results on Thursday, with CEO Lip-Bu Tan announcing significant cuts to its chip factory construction.
Tan, who took over in March, emphasized that the past few months “haven't been easy.” He said the company has “completed most” of its planned layoffs, which amount to 15% of its workforce. Intel previously announced it aims to cut operating costs by $17 billion in 2025.
Tan also announced a number of other cuts, particularly in the division that produces integrated circuits for other companies.
“Over the past few years, the company has invested too much, too quickly, without adequate demand. As a result, our factory base has become unnecessarily fragmented and underutilized. We must correct course,” the company's CEO wrote in a letter to employees published on Thursday.
“In the future, we will pursue a systematic approach to expanding our factories, fully aligned with the needs of our customers. We will be prudent and disciplined in allocating capital (…),” he added.
“With this in mind, we have decided not to proceed with previously planned projects in Germany and Poland. We also plan to consolidate our assembly and test facilities in Costa Rica with our larger facilities in Vietnam and Malaysia,” Tan said.
In June 2023, Intel announced it would invest $4.6 billion in building a semiconductor integration and testing facility in the Miękinia commune near Wrocław. The investment, located in the Legnica Special Economic Zone, was expected to create 2,000 jobs.
Europe's largest semiconductor factory was to be built in Germany. The German government was willing to contribute €10 billion to the construction of Intel's €30 billion plant in Magdeburg.
Intel shares have risen 13% this year and are expected to see their worst-ever decline of 60% in 2024, CNBC reported.
From Washington, Natalia Dziurdzińska (PAP)
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