Intel may spread new chip facility across multiple EU states

12 Jul 2021

Intel CEO Pat Gelsinger. Image: Intel Corporation

The company is seeking substantial public support for the $20bn project.

Intel is considering spreading a $20bn chip factory across several different European countries in a bid to secure EU support for the move.

The chipmaker’s CEO Pat Gelsinger met with European leaders in late June and early July, including French president Emmanuel Macron, German chancellor Angela Merkel, and Italian prime minister Mario Draghi. The company is seeking financial support from the EU for the project in order to offset what it says are substantially higher costs of manufacturing in Europe.

In May, Gelsinger said the company wanted as much as €8bn in subsidies, in addition to political support

Greg Slater, vice-president of global regulatory affairs at Intel, told the Financial Times: “We could put manufacturing on one site and packaging on another. We are well placed to make this an ecosystem-wide project, not just a couple of isolated paths in one member state.

“We do believe that this is a project that will benefit Europe at large.”

In March, the EU announced plans to host 20pc of world semiconductor manufacturing by 2030, in response to the ongoing global chip shortage and concerns about dependence on imports of critical technologies. Currently, Europe is responsible for about 10pc of global supply, with Taiwan, South Korea and Japan making up more than 60pc.

In response, Intel announced its plans for the new factory, in addition to completing an ongoing major investment into its existing site in Ireland. For the new facilities, the company is said to be examining Germany, France, the Netherlands and Belgium, and looking for approximately 1,000 acres of space.

The initial plan would involve the establishment of two fabrication facilities (fabs) at the factory, with $20bn covering a decade of operation. The company has said that total investment in the whole project could eventually top $100bn with eight fabs.

French government officials said that Intel was considering manufacturing 10nm technology or better at the new facility, while investment at the Leixlip plant is meant to pave the way for the company’s 7nm process, expected to launch in 2023. The company recently entered a partnership with Taiwan Semiconductor Manufacturing Company (TSMC) to use its 3nm technology.

Thierry Breton, the EU commissioner for the single market, has said that Europe should seek to produce 2nm chips domestically in future. Breton met with Gelsinger in May.

In addition to its Irish site, Intel also manufactures at four locations in the United States as well as in Israel and one fab in China. The deal with TSMC represents the first time Intel has outsourced manufacturing to another firm.

Jack Kennedy is a freelance journalist based in Dublin