Germany continued to oppose Intel demands for higher subsidies for a new €17 billion chip manufacturing plant, as the country’s finance minister Christian Lindner told Financial Times (FT) there is no money available in its budget.

The country’s government had previously suggested it could be open to increasing its backing from the €6.8 billion offered to around the €10 billion sought by the chip company due to rising energy and construction costs, but only if Intel was to increase its own investment.

However, Lindner told FT he is opposed to upping the support because of a lack of funds, adding the government is “trying to consolidate the budget right now, not expand it”.

Intel announced in 2022 it would put €33 billion into boosting chip manufacturing in Europe, €17 billion of which is being used on a factory in Germany consisting of two semiconductor plants in the city of Magdeburg.

The German factory is seen as pivotal to the European Union’s goal of doubling its share of the global semiconductor market to around 20 per cent by 2030, outlined in its EU Chips Act, which includes a €43 billion fund offered to countries in the bloc looking to invest in the sector.

While Lindner is reluctant about Intel’s funding goals, FT added some politicians including Economy minister Robert Habeck believe Germany should be targeting an investment level akin to the US, which has set aside $52 billion in funding to boost domestic manufacturing.

Government sources also suggested other options are on the table to appease Intel, including potentially providing cheaper electricity for the Magdeburg plants.