Intel Pulls Back on European Manufacturing, Leaving EU’s Chip Future in Doubt

Intel has scrapped plans to build two major semiconductor facilities in Europe, halting a €30 billion factory in Germany and a test and assembly site in Poland—moves officially announced in the company’s Q2 2025 financial filings.

The company cited unsustainable costs, unsuccessful subsidy negotiations with the German government, and its push to consolidate operations in lower-cost regions like Malaysia, Vietnam, and Costa Rica.

This marks a blow to the European Union’s goal of boosting local chip production and achieving digital autonomy. Europe currently manufactures under 10% of the world’s chips, according to official EU data, focusing mainly on older types needed in cars and machinery.

Most advanced chips—crucial for AI, healthcare, defense, and communications—come from Asia or the United States. The EU’s landmark “Chips Act” aimed to raise Europe‘s global share to 20% by 2030, but the collapse of these projects raises doubts about that target.

Recent reports from IC Insights and the European Commission forecast that by 2030, Europe will need to import over eight million semiconductor wafers annually, primarily from China and other Asian producers.

Europe lacks the factories, investment, and trained workers to compete with Asia and the US in advanced chip manufacturing. Companies like ASML in the Netherlands lead in semiconductor equipment and technology.

However, those strengths have not translated into large-scale chip production. The automotive, healthcare, and defense sectors in Europe remain vulnerable as chip supply chains tighten.

Without new local capacity, reliance on imports from Asia will only increase, deepening exposure to global disruptions.

The official statements from the EU and German government confirm that Intel’s cancellation leaves a major hole in the bloc’s industrial plans, and further sets back its ambitions for technological independence.

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