Intel Cancels Europe Chip Plants, Cuts 21,000 Jobs, Posts $2.9B Loss

Intel has officially abandoned its ambitious €30 billion semiconductor factory project in Magdeburg, Germany, which was initially expected to create around 3,000 direct jobs and supported by nearly €10 billion in government subsidies. This cancellation, after being on hold since late 2024, reflects Intel CEO Lip-Bu Tan's critical stance on the previous expansion strategy, which he deemed "unwise and excessive," and underscores the company's shift toward more disciplined spending and focus on AI and foundry operations. Alongside this, Intel is also canceling a planned fab project in Poland and delaying construction at its $28 billion Ohio facility. The company reported a $2.9 billion net loss for Q2 2025, largely due to restructuring, impairment, and one-time charges, while reducing its workforce by 15% to approximately 75,000 employees and consolidating operations by moving testing from Costa Rica to Southeast Asia. These moves aim to streamline Intel’s global production footprint and prioritize higher-margin, AI-driven market segments amid a challenging semiconductor landscape and cooling demand. The German government’s ambitions to develop domestic semiconductor manufacturing face a setback with Intel’s withdrawal, highlighting broader challenges in establishing Western chip production capacity.