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Intel injects billions into European semiconductor push

With no end in sight to the semiconductor shortage, Intel is blowing the budget on ramping up European manufacturing, packaging and R&D

Intel has unveiled the first phase of an €80bn plan to develop semiconductor fabrication (fab) and packaging across the European Union over the next decade.

The investment covers an initial €17bn in a semiconductor fab “mega-site” in Germany, the creation of a new R&D and design hub in France, and a commitment to invest in R&D, manufacturing and foundry services in Ireland, Italy, Poland and Spain.

In February, the European Commission (EC) proposed a European Chips Act to encourage the development of a thriving semiconductor sector from research to production, as well as a resilient supply chain. The EC aims to mobilise more than €43bn of public and private investments and set measures to prevent, prepare, anticipate and swiftly respond to any future supply chain disruption.

Intel CEO Pat Gelsinger said the company plans to bring its most advanced technology to Europe, creating a next-generation European chip ecosystem and addressing the need for a more balanced and resilient supply chain.

“Our planned investments are a major step both for Intel and for Europe,” he said. “The EU Chips Act will empower private companies and governments to work together to drastically advance Europe’s position in the semiconductor sector. This broad initiative will boost Europe’s R&D innovation and bring leading-edge manufacturing to the region for the benefit of our customers and partners around the world. We are committed to playing an essential role in shaping Europe’s digital future for decades to come.”

In the initial phase, Intel plans to develop two semiconductor fabs in Magdeburg, Germany, the capital of Saxony-Anhalt. Pending European Commission approval, work on building these facilities is expected to begin in 2023. Intel said production is planned to come online in 2027. The fabs will be used to deliver chips using Intel’s Angstrom-era transistor technologies, serving the needs of both foundry customers and Intel for Europe and globally, as part of the company’s integrated device manufacturer 2.0 strategy.

According to Intel, Germany is an ideal place to establish a new hub – a “Silicon Junction” – for advanced chipmaking. Building the fab plants will create 7,000 construction jobs over the course of the build. It said there will be 3,000 permanent high-tech jobs at Intel, and tens of thousands of additional jobs across suppliers and partners.

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It will also continue to invest in its Leixlip, Ireland, expansion project, spending an additional €12bn and doubling the manufacturing space to bring Intel 4 process technology to Europe and expand foundry services. Once complete, this expansion will bring Intel’s total investment in Ireland to more than €30bn.

Intel is also negotiating with Italy to invest up to €4.5bn to enable a back-end manufacturing facility. According to Intel, this factory would create approximately 1,500 Intel jobs plus an additional 3,500 jobs across suppliers and partners, with operations to start between 2025 and 2027. With new and innovative technologies, Intel and Italy aim to make this facility a first of its kind in the EU. 

In total, Intel said it plans to spend more than €33bn on these manufacturing investments. By significantly increasing its manufacturing capacities across the EU, Intel said it would lay the groundwork to bring various parts of the semiconductor value chain closer together and increase supply chain resilience in Europe.

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