A German court made a negative ruling, and Intel may lose about 10 billion euros in subsidies.

Some media reported that veteran U.S. chipmaker Intel (INTC.US) may eventually lose billions of euros in subsidies after a German court last week made a negative ruling on Germany's state finance support for Intel. According to media reports, Sven Schulze, the economics minister of the German state of Saxony-Anhalt, told the German magazine WirtschaftsWoche: "The court's negative ruling on Germany's finances last week may cause Intel to lose its subsidy support. When Germany can no longer afford future-oriented projects like Intel, the economic losses will be huge and the damage to its image will be huge."

An Intel spokesman declined to comment. As U.S. stocks closed on Wednesday, Intel's stock price rose slightly by 0.07%. Since the release of the financial report on October 27, Beijing time, Intel's stock price has risen by more than 30% since the release of the financial report, boosted by better-than-expected performance data and the recovery trend of the global chip industry.

In June this year, Intel signed a revised letter of intent with the German government for the US chip giant's plan to establish a leading wafer manufacturing base in Magdeburg, the capital of the state of Saxony-Anhalt.

According to the revised letter of intent, the German government originally planned to provide approximately 10 billion euros in subsidies, including financial subsidies and energy price cap subsidies. In September of this year, media reported that Intel had encountered major staffing problems at its Magdeburg factory.

Intel's proposed massive factory in Magdeburg is part of a major plan by the chip giant to invest up to $88 billion in Europe over the next decade to boost its chip manufacturing business.

In July this year, the EU finally received formal approval from the European Council (European Council) for its Chips Act, in order to officially compete with regions such as North America and Asia in the field of chip manufacturing.

Intel previously predicted in its financial report released on October 27 that the company's total revenue will resume a year-on-year growth trend in the fourth quarter, driven by an improvement in the personal computer market and a more competitive product line. The optimistic outlook provided by Intel shows that the veteran chip giant is rapidly gaining momentum in a comprehensive turnaround of the company's fundamentals under the leadership of Chief Executive Pat Gelsinger.

It is worth noting that Intel has recently made a big move into the so-called chip foundry industry, which is also the most important link in boosting the company's chip manufacturing business. The chip foundry industry is an industry in which chip manufacturers outsource the production of chips for other chip companies, such as chip companies with the Fabless business model. Intel CEO Gelsinger has launched a costly plan to build factories around the world, aiming to attract customers including competitors such as Nvidia and AMD to participate in the foundry plan. Intel's proposed large factory in Germany is based on this background.

But this foundry business currently accounts for only a small part of Intel's total business. The revenue of the foundry segment last quarter was approximately US$311 million, compared with US$78 million in the same period last year. KeyBanc Capital Markets analyst John Vinh said that Intel's current recovery is mainly driven by customers replenishing PC chip inventories, rather than a larger foundry business shift.