Intel, Italy announce intensified talks over € 8 billion chip factory


Intel and Italy are stepping up talks about investments estimated at around 8 billion euros (around Rs. 68,120 crore) to build a state-of-the-art semiconductor packaging plant, two sources familiar with the matter told Reuters.

A deal of this scale would guarantee Italy about 10% of the 80 billion euros (roughly Rs.680,920 crore) that the US company plans to spend over the next decade in Europe on advanced manufacturing capacity. in order to avoid future shortages of semiconductor chips.

Sources previously told Reuters that the size of the investment was in a range of € 4 billion (around Rs 34,045 crore) to € 8 billion (around Rs 68,120 crore).

As part of the plan, Germany, the European Union’s largest economy, is leading the way to land Intel’s European “megafab” plant, although France remains in the race, Reuters reported in October.

Intel said it is having “constructive investment conversations with heads of government from several EU countries,” but declined to comment specifically on discussions with Italian officials.

“We are encouraged by the many opportunities to support the EU’s digital agenda and semiconductor ambitions to 2030. While the ongoing negotiations are ongoing and confidential, we plan to make an announcement soon. as possible, “the company said in a statement.

Chipmakers are scrambling to ramp up production after explosive demand for consumer electronics such as smartphones and computers resulting from the trend to work from home during the COVID-19 pandemic.

Meanwhile, EU countries, where many jobs still depend on industries such as automobile manufacturing, are keen to reduce their dependence on semiconductor supplies from China and the United States. United after recent supply chain issues.

The proposed Italian plant would be a state-of-the-art packaging plant using innovative technologies to weave complete chips.

Intel and the Italian government of Prime Minister Mario Draghi are discussing a global investment of $ 9 billion (around Rs. 67,640 crore) over 10 years from the start of construction, the sources said.

The negotiations are complex and Rome wants Intel to clarify its plans for Italy before formalizing a package of favorable conditions, especially on employment and energy costs, they added.

If Rome and Intel strike a deal, then they will proceed with choosing a site for the plant, the sources said.

However, its chief executive Pat Gelsinger said earlier this month that he hoped to announce the location of new chip factories in the United States and Europe early next year.

In April, the Italian government used anti-takeover legislation to block a planned sale of a controlling stake in a local semiconductor equipment maker to Chinese firm Shenzhen Invenland Holdings.

© Thomson Reuters 2021


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