Italy joins Germany in fight to open Intel chip manufacturing plant

Italy is preparing a plan for compete with Germany for the installation of a chip factory in Intel. At present, the German country is the territory that has the most ballots for the chip developer to build one or more of its factories in the European Union, but the government of the country, according to several sources to Reuters, is preparing an initiative to try to convince Intel to open an advanced chip manufacturing plant on Italian soil.

These factories are part of a push by Intel to develop and expand its state-of-the-art manufacturing capacity to try to avoid future problems due to shortages of supplies, such as the one currently affecting the industry, and which it is having an impact in several sectors.

The Italian authorities are apparently already negotiating with Intel on a potential investment, which according to various preliminary estimates would exceed 4,000 million of euros. In fact, one of the sources estimates that this investment could reach around 8,000 million euros, although it all depends on Intel’s plans.

The authorities are willing and ready to finance part of the investment with public money, and also to offer favorable conditions to Intel, both in the labor field and in terms of energy costs. If built on Italian soil, one of these factories would create more than a thousand direct jobs in the country. Such a plant, if built, would be dedicated to advanced packaging, employing new technologies for assembling complete chips from components produced by Intel or other chip manufacturers.

Among the locations that could host this factory are the Mirafiori area in Turin, where the automaker Stellantis is located, and Catania, in Sicily, where the French-Italian chipmaker STMicroelectronics already operates. Apparently, according to sources, the Italian government is preparing a very detailed offer, and intends to reach an agreement before the end of the year. The negotiations, therefore, would already be in an advanced stage, although yes, there is still no agreement. At the same time, Italy also has the potential to be the headquarters of an Intel research center, which is another leg of the investments that the company is preparing to make in Europe.

But Germany is a very serious competitor, and the German town of Dresden appears to be the favorite so far for the construction of the Intel facility. Of course, there is no firm decision in this regard, and Intel’s plans may change in the coming weeks.

But Italy is not the only country that is going to challenge Germany for the construction of the factory, because France also has ballots to house the facilities. What’s more, Poland, which already has Intel facilities, wants to compete with Italy by advanced packaging plant. In total, the American company wants to build two chip manufacturing plants in the European Union, and its CEO, Pat Gelsinger, has indicated that it will announce its future location before the end of this year. But it will not be in the United Kingdom, which has been dropped from the list of candidate countries due to Brexit.

This competition comes at a stage in which the European Union is trying to reduce its dependence on semiconductor supplies from the United States and China, while the crisis caused by the shortage of semiconductors does not seem to end in the short or medium term. The crisis has hit the automotive sector hard, both because of shortages and because chipmakers prefer to sell their components to consumer electronics customers, who buy more advanced chips and leave higher margins.

The Prime Minister of Italy, Mario Draghi, has stated that the European Union must act immediately and decisively to move towards the EU goal of producing 20% ​​of the world’s semiconductors by 2030. Furthermore, the construction of any plant will take years, which will not It helps car manufacturers in Europe in the short term, although it will do so in the future to avoid situations like the current one. In this regard, Pal Gelsinger has stated that Intel plans to reserve manufacturing capacity for automakers at its plant in Ireland, in addition to helping them change their plans to use its technology. But like everything, this will take a while.

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