Intel Wants to Invest 80 Billion Euros in The European Chip Sector

Written by Miguel Nazar

Mar 24, 2022

March 24, 2022

PC

Intel Wants to Invest 80 Billion Euros in The European Chip Sector
The American chip manufacturer Intel will invest tens of billions of euros in its European chip production in the coming years. For example, there will be a new production location in Germany. The announcement comes more than a month after the European Commission announced a new bill to stimulate the chip sector in the EU. […]

The American chip manufacturer Intel will invest tens of billions of euros in its European chip production in the coming years. For example, there will be a new production location in Germany.

The announcement comes more than a month after the European Commission announced a new bill to stimulate the chip sector in the EU. Due to the persistent chip shortages, the EU wants to stand on its own two feet. Europe now accounts for 8 percent of global chip sales, which should be 20 percent by 2030.

Intel’s plans are the first concrete elaboration of the plans. The first investment round is worth more than 30 billion euros, spread over a total of six European countries. The Netherlands is not included. Ultimately, the company wants to invest around 80 billion euros in Europe this decade. The EU itself wants to invest around €43 billion in the sector this decade.

Up to 50 percent subsidy

Intel has been flirting with Europe for months, so it comes as no surprise that this step is being taken. What is still unclear is how much money Intel expects to receive from national governments and the EU. In a press interview, Maurits Tichelman, general manager for Europe, among others, says that the “competition is such that we need subsidies of 33 to 50 percent to close the gap”.

The American group says it can build the factories in Germany with an investment of 17 billion euros, but Tichelman suggests that it may want to see up to half of that money in subsidies. That means billions of euros. Talks about this are still ongoing, he says, but they are “at an advanced stage”. Intel also wants to expand its factory in Ireland for 12 billion euros.

In any case, it is already clear that Brussels welcomes Intel with open arms: committee chairman von der Leyen was even in Intel’s online video to emphasize how important the step is by the American manufacturer. German Chancellor Scholz also welcomes Intel’s investment.

 

Remarkably enough, the Netherlands is not mentioned in the overview, while the world’s most important chip machine maker, ASML, is located here. Tichelman says that the company has been busy for a year with the talks, and talks have also been held with the Netherlands. But that came to nothing. It is unclear whether this had to do with the subsidies that the government was willing to pay. He does emphasize the importance of ASML for the sector.

With the new factories in Germany, Intel wants to focus on the most advanced technology available at that time – in 2027. This will be needed, for example, for the production of electric cars. Intel is looking at chips of 2 nanometers or less.

The Financial Times points out that there are questions in the sector as to whether you really meet the wishes that exist there. “If you want to make the European industry independent, it is better to invest in 28 to 16 nanometers,” a high-ranking source in the European chip sector told NOS.

When asked, Tichelman of Intel points out that, for example, the expansion of the factory in Ireland is aimed at this. He is convinced that Europe also needs the most advanced technology. Although the factories will not produce exclusively for Europe, but will participate in global demand.

Space needed for ‘small village’

“Intel has some catching up to do compared to its main competitors and with these investments, the company is catching up,” said Daniel Citroen. He follows the chip sector for ING. “The biggest challenge for Intel is to make sure production doesn’t get too expensive, which is something Samsung and TSMC have become very good at.”

“It is not so strange that they choose Germany,” says Citroen. “There is already a lot of production there. In addition, you have to build a small village around such a factory. So you have to have the space for it and that is difficult in the Netherlands.”

But, he says at the same time, Intel could also have chosen to bring the research center that is now located in France to the Netherlands. It is obvious that ASML will probably earn a lot from all investments in the coming years. The Dutch group has a monopoly on the production of the most advanced chip machines.

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