Intel chooses Germany for first new Mega Europe investment in complex chip production

Intel has chosen Germany as the site of a new chip manufacturing complex, with the first details of its $ 88 billion (roughly $ 6.70.187 billion) investment in Europe, trying to reduce import confidence and alleviate supply cuts. for manufacturers.

The plan is the latest announcement of major investments by a major semiconductor manufacturer as the industry tries to cope with rising demand for mobile phones and cars, although new repairs will not be made quickly by new German power plants. Log in until 2027.

U.S. chipmakers are expanding their investment to about half a dozen countries in Europe, including expanding a factory in Ireland, setting up a design and research facility in France, and a packaging and assembly site in Italy.

Initial spending will be € 33 billion (approximately € 2.76.294 billion), including € 17 billion (approximately € 1.42.337 billion) in Germany, where the car industry is likely to be the main customer for cutting-edge chips. It can use technology as small as 2 nanometers.

German carmaker Volkswagen highlighted the pain caused by a shortage of chips on Tuesday, saying it had sold 2 million fewer cars than expected last year because of the problem.

Intel’s announcement last month was made by the European Commission after plans to boost chip manufacturing in the European Union, proposing new legislation to ease state aid rules for chip manufacturing and allow more $ 17 billion (about 1.29.479 billion) to the public and the public. private investment.

Chip makers want to build more factories to make advanced chips for use in premium phones like Apple’s latest iPhone models that use 5-nanometer technology. One nanometer is the width of a few atoms.

Stacy Rasgon Bernstein Research analyst was confident that Intel could manage to meet the demand to drive the investment, and it was a positive expansion with government funding.

“(Intel) is using power as a strategic weapon … Part of the current strategy is to go around the world and demand money,” Rasgon said. “It’s time to dump her and move on. It’s time to dump her and move on.”

Great incentives

Germany has emerged as a big winner in the wake of most of Intel’s investment, but CEO Pat Gelsinger did not mean the amount of state aid the company receives from the country.

Intel will build two plants in Magdeburg, Germany, creating 7,000 construction jobs, 3,000 permanent jobs in the company, and tens of thousands more jobs among suppliers and partners.

Gelsinger said Intel intends to spend $ 80 billion (approximately € 6,69,470 million) on its planned investment over the next 10 years to build the entire Magdeburg site and further develop the Italian and French sites.

The company will invest an additional € 12 billion (approximately € 1.00.47 billion) in an existing Irish facility, bringing its total investment in Ireland to over € 30 billion (around € 2.51.187 billion).

It is also in talks with Italy to set up a chip assembly and packaging plant for a potential investment of € 4.5 billion (approximately € 37,678 million), which is expected to be up and running between 2025 and 2027.

In France, Intel plans to build a new European research center, creating 1,000 new high-tech jobs.

The company will also expand its laboratory space in Poland and plan to set up laboratories in Spain in conjunction with the Barcelona Supercomputing Center for advanced computing.

Gelsinger announced plans to spend $ 88 billion in Europe over the next decade in September, and the choice of sites to persuade the chip maker to invest in their countries after some European Union governments offered major incentives including Italy.

Expanding its plants to different locations can help the company get more funding from different countries.

But Intel will have to negotiate with each European country to find state aid facilities, European Industry Commissioner Thierry Breton told reporters.

He also said that the Commission was in talks with other chip producers and hoped to make similar announcements in the coming months, but did not provide details.

© Thomson Reuters 2022

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