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Intel, Italy Said to Intensify Talks Over EUR 8-Billion Chip Factory

Two sources close to the situation have told Reuters that Intel and Italy are accelerating negotiations over an investment of roughly 8 billion euros ($9 billion) to establish an advanced semiconductor packaging plant. A deal of this size would secure Italy around 10 percent of the 80 billion euros the US business plans to spend on cutting-edge production capacity in Europe over the next decade to help avoid future semiconductor chip shortages.

Courtesy: gadgets.ndtv.com

It was earlier reported that the investment will be in the range of 4 billion euros  to 8 billion euros. According to some sources, Germany, the largest economy in the European Union, is in the lead to land Intel Corp.’s (INTC.O) proposed European ‘mega fab’ plant, though France is still in the running.

Intel stated that it is “having fruitful investment dialogues with government leaders in numerous EU nations,” but did not elaborate on its discussions with Italian officials.

“The numerous opportunities to help the EU’s digital agenda and 2030 semiconductor aspirations inspire us. We hope to make an announcement as soon as feasible, while present negotiations are continuing and confidential,” the business said in a statement.

Chipmakers are scrambling to increase output after the COVID-19 epidemic triggered a surge in demand for consumer gadgets such as cell phones and PCs due to the work from home trend. Meanwhile, following recent supply chain issues, European Union countries eager to lessen their reliance on semiconductor supplies from China and the United States, where many employment still rely on industries such as automobile manufacture. The projected Italian factory would be a cutting-edge packaging facility that would weave complete chips using cutting-edge technologies.

According to the sources, Intel and Prime Minister Mario Draghi’s Italian government are contemplating over a $9 billion investment over ten years from the start of construction. They noted that because the negotiations are complicated, Rome wants Intel to clarify its objectives for Italy before formalizing a package of favorable terms, particularly on jobs and energy prices.

According to the sources, if Rome and Intel reach an agreement, they will move forward with selecting a location for the factory. However, Pat Gelsinger, the company’s CEO, indicated earlier this month that he wanted to disclose the locations of additional chip facilities in the US and Europe early next year.

In April, the Italian government utilized anti-takeover legislation to prevent China’s Shenzhen Invenland Holdings Co Ltd from buying a controlling position in a local semiconductor equipment manufacturer.

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