Intel and the Italian government are intensifying talks to build an advanced semiconductor packaging plant in a bid to reduce Europe’s chip dependence on China and the US, two sources close to the matter said.
A deal of this size would secure Italy about 10% of the 80 billion euros the US company is looking to spend over the next decade in Europe on cutting-edge manufacturing capacity to help avoid future shortages of semiconductor chips.
The facility is estimated to cost about 8 billion euros ($9 billion). Sources had previously told Reuters that the investment size was in a 4 billion to 8 billion euro range.
As part of this plan, Germany, the European Union’s largest economy, is in the lead to land Intel’s planned European ‘megafab’ plant, although France remains in the running.
Intel declined to comment on Thursday on the talks or the size of an investment it might make, adding that it has not announced any changes to its plans.
Booming Demand for Consumer Electronics
Chipmakers are scrambling to boost output after explosive demand for consumer electronics such as smartphones and computers resulting from the work-from-home trend during the Covid-19 pandemic.
Meanwhile, EU countries, where many jobs still rely on industries such as car manufacturing, are eager to reduce their dependence on semiconductor supplies from China and the US after recent supply chain problems.
Asian governments have sought talks with EU officials over chipmaking joint ventures.
The proposed Italian factory would be an advanced packaging plant using innovative technologies to weave full chips.
Intel and the Italian government of prime minister Mario Draghi are discussing an overall investment of $9 billion over 10 years from when construction begins, the sources said.
- Reuters with additional editing by George Russell