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Intel To Invest $20 Billion In EU Chip Production

Because Europe has set itself the goal of having semiconductor products manufactured within the continent which accounts for about 20 percent of the global market by 2030, Intel is also sensing morning air and promises that investments in new technologies should have a positive effect throughout Europe.

According to Intel’s comments to the Financial Times, getting the necessary government grants for a planned new chip plant in the European community could “benefit the whole of Europe.” Intel had previously held out the prospect of spending around $20 billion on a new plant in Europe but tied this to conditions.

Only the subsidies make production economical

Intel CEO Pat Gelsinger’s latest visit to Europe included meetings with French President Macron and Italian Prime Minister Draghi. Among other things, Gelsinger solicited the broadest possible support from the EU states with subsidies for the construction of the new chip plant. Should the money flow, the logic goes, the construction of the plant could ensure positive effects throughout Europe.

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Thus, it is open where the location of the actual chip plant should be, but also where the other facilities necessary for its operation should be located. These could also be located in regions other than the chip plant itself, according to Intel’s reasoning. As a result, other areas could benefit from Intel’s involvement in addition to the chip plant location, it is said.

Production And Testing

Production could be carried out at one location, but the packaging, testing, and other tasks could be performed at other locations. The conditions for a pan-European project are good in this case, Intel representatives told the Financial Times. Another important factor is that government support will make building the new chip manufacturing sites economical for Intel in the first place.

This is no different in Asia, at least according to Intel. Compared to Asia, the cost disadvantage in Europe is about 30 to 40 percent, much of which is said to be due to support from the respective governments. However, Intel’s negotiations with the representatives of the European countries are also about many other factors that make the construction of the plants here quite costly.

Intel Needs More Space And Money

Intel needs a site of at least 1,000 hectares, which is also well connected in terms of infrastructure. Initially, two and later up to eight chip plants could be built there, which Intel expects to spend 20 billion dollars to operate over 10 years. Over the entire lifetime of the plants, investments of up to 100 billion dollars are expected to be necessary.

First, however, it must be clarified what type of chip production is to take place there. Intel actually wants to manufacture 10-nanometer chips first, but even this could be too advanced for the needs of European customers. At least, that’s what the Financial Times’ sources claim, assuming that the majority of potential industry buyers are currently using older manufacturing technologies with wider structure widths.

Intel plans to make a decision by the end of 2021, together with politicians, on where and how to place the group’s investments in chip manufacturing in Europe. According to the current status, Germany, Belgium, France, and the Netherlands are all possible locations.

Mark Goodman

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