Government subsidies are crucial for fabs in the U.S., Europe.

When Intel outlined its IDM 2.0 strategy last year, it said that to build competitive semiconductor manufacturing facilities in the U.S. and Europe it needed governments to subsidize about one third of the investments. Now, Intel is getting massive incentives from local and federal authorities with its latest fabs in the United States and European Union and intends to re-emphasize its position in front of the U.S. Senate next week. 

Earlier this year Intel established its next major manufacturing site in Ohio. Intel intends to invest about $20 billion in two fabs at the site initially with the first fab coming online in 2025. When the site is fully built out, it can house as many as eight fabs that will cost about $100 billion. The site will be Ohio's biggest economic development project in history, but to get the fab, the state had to provide Intel about $2.1 billion in various incentives. In addition, Intel is expected to get funding from the federal government as part of the CHIPS act. Overall, a significant portion of Intel's $20 billion investment will come from government coffers.

But that sums look insignificant when compared to subsidies that Intel is getting from Germany for its $18.7 billion fab project near Magdeburg. The company is reportedly getting about $5.5 billion in state aid, according to officials familiar with the matter cited by Bloomberg. $5.5 billion is about 29.4% of the project's cost.