Italy, Intel Intensify Talks Over $ 9 Billion Advanced Semiconductor Packaging Plant In The Country

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Two sources familiar with the situation told Reuters that Intel and Italy are speeding up negotiations on an investment of around 8 billion euros ($ 9 billion) to establish a state-of-the-art semiconductor packaging plant.

A deal of this magnitude would guarantee Italy around 10% of the € 80 billion the US company plans to invest in Europe over the next decade in peak production capacity to avoid future shortages. of semiconductor chips.

Reuters had previously announced that the investment would be in the order of 4 to 8 billion euros. According to Reuters, Germany, the largest economy in the European Union, is in the lead to land the European plant proposed by Intel Corp. (INTC.O), although France is still in contention.

Intel said it “had fruitful investment dialogues with heads of government from many EU countries,” but did not elaborate on its discussions with Italian officials.

“We are encouraged by the many opportunities to support the EU’s digital agenda and the 2030 ambitions for semiconductors. While the ongoing negotiations are ongoing and confidential, we plan to make an announcement as soon as possible, ”the company said in a statement.

Chipmakers are scrambling to ramp up production after the COVID-19 outbreak sparked increased demand for consumer gadgets like cellphones and PCs due to the work-from-home trend.

Meanwhile, following recent supply chain issues, EU countries are keen to reduce their dependence on semiconductor supplies from China and the United States, where many employers still depend on industries such as automobile manufacturing.

The proposed Italian factory would be a state-of-the-art packaging facility that weaves complete chips using state-of-the-art technology. According to the sources, Intel and the Italian government of Prime Minister Mario Draghi are planning an investment of $ 9 billion over ten years from the start of construction.

They noted that due to the complexity of the negotiations, Rome wants Intel to clarify its objectives for Italy before formalizing a package of favorable conditions, especially on employment and energy prices. According to the sources, if Rome and Intel come to an agreement, they will go ahead with the selection of a location for the plant.

However, Pat Gelsinger, CEO of the company, indicated earlier this month that he wanted to disclose the locations of additional chip installations in the United States and Europe early next year. In April, the Italian government used anti-takeover legislation to prevent Chinese firm Shenzhen Invenland Holdings Co Ltd from buying a controlling position in a local semiconductor equipment maker.

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