Poland's Intel plant gets EU green light for $1.9 billion in state support

WARSAW (Reuters) - The European Commission has given Poland a green light to support an Intel chip assembly and testing plant with more than 7.4 billion zlotys ($1.91 billion) in state aid, the government said on Friday. 

The decision comes as Intel grapples with a cost-cutting drive that has raised questions whether it may delay or cancel some European expansion plans, which also include a major new chip manufacturing plant in Germany.  

"The European Commission has informed Poland that there is a green light for granting state aid to Intel," Deputy Prime Minister Krzysztof Gawkowski said.    

"The public aid that we will provide amounts to over 7.4 billion zlotys in the years 2024-26. Today this investment is worth, both in terms of the aid package and in total, over 25 billion zlotys," he added.    

Poland must now pass legislation on granting the public funds and then formally notify the European Commission, before it can finalise the deal with Intel. 

"We assess that this whole process will be completed by the end of the year," Deputy Digital Affairs Minister Dariusz Standerski said.

A spokesperson for Intel said the company appreciated "the Polish government’s continued support and partnership".

An Intel spokesperson at the closely-linked German project declined to comment beyond repeating that the company wanted to serve European customers and "execute on our plans". That $33 billion project is still awaiting EU approval and ground-breaking has been delayed until May 2025 at the earliest.

Intel announced plans last year to invest up to $4.6 billion in the facility near Wroclaw in south-western Poland, with capacity for further expansion.

The investment aligns with the European Chips Act, billed as a 43 billion euro subsidy plan aimed at boosting Europe’s share of the global chip market to 20% by 2030. 

"We have not received any signals in recent weeks or months regarding a change in position ... Based on today’s information there is nothing that would slow down this investment," Gawkowski said, when asked about the risks to the investment in Poland. He said he hoped Intel could start construction works this year.    

"Investment in the Intel factory is the largest investment in Poland in decades ... semiconductors in Poland will guarantee both better economic development and greater security."

Standerski said that Poland was ready for further new technology investments and the experience gained with Intel would help the country expedite future investments.

($1 = 3.8658 zlotys)

(Reporting by Barbara Erling and Karol Badohal. Editing by Jane Merriman and Mark Potter)