Germany is looking to give Intel Corporation public funding worth more than 5 billion euros ($5.5 billion) to build a massive semiconductor plant, as part of European Union plans to establish domestic production of chips, according to officials familiar with the negotiations.

Intel is beginning work on a state-of-the-art semiconductor production site worth 17 billion euros ($18.7 billion) in Magdeburg, Germany, the company announced Tuesday. Germany and Intel have so far been negotiating the exact amount the company might receive, but officials familiar with the matter said the government plans to provide government aid worth more than 5 billion euros.

The deal will need European Commission scrutiny and approval under aid rules for countries in the region. The office of the Economy Minister, Robert Habeck, said that the final amount of support would depend on talks with the Commission, adding that given the high investment that Intel would make, the amounts of public funding should reach billions.