Intel, the U.S. chipmaker, announced Tuesday plans to invest as high as 80 billion euros ($88billion) in Europe as part of an ambitious expansion to correct imbalances in Europe’s semiconductor industry. This is to address large chip shortages.
Chief Executive Officer Pat Gelsinger stated that Intel would invest the money in the next decade “along all the semiconductor value chain.”
The company intends to invest tens of trillions of dollars in setting up and expanding chip production facilities and research and development centers in Germany, France, Ireland, France, and Italy.
“Why aren’t we doing it?” Gelsinger stated in a webcast that the world has an insatiable need for chips or semiconductors.
Intel stated that it will bring its most advanced technology to Europe in order to meet the demand for a more balanced and resilient semiconductor supply chain.
Last month, the European Union announced a $47 Billion “Chips Act to help the continent become a major producer of semiconductors and reduce its dependence on Asian markets for these tiny components. These small parts are the electronic brains that power everything from smartphones to gaming consoles and cars.
As the global economy recovers from the COVID-19 pandemic the demand for chips has risen, but the supply has not kept pace with demand because of bottlenecks.
Ursula von der Leyen, President of the European Commission, hailed this announcement as the first major achievement in the EU Chips Act.
“I’m certain it will open the door for more companies,” stated von der Leyen. He wants the EU to increase its global chip production by 20% to 2030.
Santa Clara-based Intel’s first phase includes 17 billion euros to increase its European production capability with a cutting-edge semiconductor fab “megasite” in Magdeburg. Two semiconductor factories or fabs will be built on the site, which will produce chips using Intel’s most advanced technology. It is expected to begin construction next year, and be online by 2027, if the European Commission approves. This will create 3,000 high-tech jobs.
Robert Habeck, Germany’s economy minister, welcomed the news and said it would increase “Europe’s digital sovereignty.” He also stated that the German government will provide financial support for the new facility.
These plans call for an additional 12 billion euros in investment to expand Intel’s Leixlip site, Ireland. This will include doubling the manufacturing space and expanding its foundry services business which makes chips made by other companies. This will increase the company’s Irish investment to over 30 billion euros.
Intel claims it is also in negotiations with Italy to “enable a state-of the-art back-end production facility.” This would require potential investment of upto 4.5 billion euros, and create thousands of indirect and direct jobs.
Plans include a research and design hub in France and a foundry center in Poland, as well as expanded lab space in Poland. There is also a partnership with local researchers to create an advanced computing laboratory in Spain.
Intel is the No. According to Gartner technology research and advisory firm, Intel is the No. 2 semiconductor manufacturer in the world. A $20 billion factory has been built in Ohio.
