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This decision represents a significant setback for both the German and Polish governments, which have invested heavily in these projects and promoted them as vital enhancements to their national industries.
Additionally, Intel indicated a reduction in its initiatives in Malaysia, while confirming that its operations in the United States would not be impacted.
In Germany, the commencement of construction for the Intel facility was scheduled for 2023 but was delayed following the inflation surge triggered by the Ukraine conflict.
After months of negotiations regarding financing, German officials and Intel reached an agreement in June 2023, which included increased subsidies.
Germany raised its financial commitment for the €30 billion ($33 billion) factory project to nearly €10 billion, an increase of €3 billion from the initial offer.
Intel CEO Pat Gelsinger stated, "We have recently expanded our capacity in Europe through our factory in Ireland, which will continue to serve as our primary European hub for the foreseeable future."
He further noted, "We will delay our projects in Poland and Germany by about two years due to projected market demand."
In Poland, Intel had secured $1.8 billion to establish a semiconductor manufacturing facility near Wroclaw.
European nations are striving to enhance semiconductor production, essential for various applications from military aircraft to smartphones, while also aiming to reduce dependence on Asian suppliers following pandemic-related shortages and the geopolitical risks highlighted by the war in Ukraine.
On the same day, Intel announced it would receive up to $3 billion in direct funding from the US government to bolster its semiconductor manufacturing for the military, as part of efforts to "secure the domestic chip supply chain," according to the company.
Intel also committed to collaborating with the Department of Defense to strengthen the resilience of US technological systems.