Intel close to $5 billion deal with Italy for chip factory
Intel is in talks with the Italian government to seal a deal that will see the renowned chip manufacturer build an advanced semiconductor packaging and assembly plant in the country. T he initial cost of the plant is estimated to be $5 billion but is likely to rise over time.
And according to unnamed sources close to the story, the Italian government is willing to fund 40% of the total investment in the project. Italy said in a report on its National Reform Program in June 2022 that it had set aside a fund designed to promote investments in microelectronics with a total budget of $4.25 billion from 2022 to 2030.
And according to unnamed sources close to the story, the Italian government is willing to fund 40% of the total investment in the project. Italy said in a report on its National Reform Program in June 2022 that it had set aside a fund designed to promote investments in microelectronics with a total budget of $4.25 billion from 2022 to 2030.
The sources further revealed that the government of outgoing Prime Minister Mario Draghi is keen to get the deal concluded later this month which will fall before the country’s general elections scheduled for September 25.
The news come against a backdrop of Intel’s announcement last year to expand its chipmaking facilities across Europe. The company noted that it’s looking to invest at least $81.8 billion in its semiconductor manufacturing infrastructure across the continent over the next 10 years.
In yet another boss move early this year, the company announced that they will be building a manufacturing mega-fab at a site in Magdeburg in eastern Germany worth about $17.4 billion.
There are also plans underway to invest an unnamed amount in manufacturing, research and development and chip design in Ireland, France and elsewhere.
This massive expansion by Intel is part of the company’s initiative to diversify after acknowledging that it is too reliant on chip-making capacity in Asia.
"Today 80 per cent of chips are produced in Asia. Our landmark pan-European investment addresses the global need for a more balanced and resilient supply chain," Intel CEO Pat Gelsinger said during the company’s announcement of expansion into Europe.
“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,” he added.
Intel’s decision to expand into Europe comes after the European Commission earlier this year announced that it would invest about $44 billion into research and development, as well as to attract chipmakers to set up manufacturing sites in a bid to bolster Europe’s semiconductor industry.
Intel is also one of the companies expected to benefit from the recently passed CHIPS and Science Act in the US, which aims to direct $52 billion of its budgeted funds towards the construction of semiconductor manufacturing facilities on US soil.
