Intel to invest $20 billion into EU chip market

The company is currently looking for a site in the region with at least 1000 acres of land

US chip maker Intel is planning to invest about $20 billion (about £14.5 billion) in new chip fabrication facilities (fabs) across Europe, as it lobbies to win political and financial support for the project in the region.

According to the Financial Times, the chip maker is currently looking for a site with at least 1,000 acres of land that can support up to eight fabs, while also providing access to an appropriate talent pool.

Greg Slater, VP of global regulatory affairs at Intel, told the FT that the company hopes to build at least one factory for manufacturing and one for advanced packaging in Europe.

Belgium, France, Germany and the Netherlands are the potential hosts for these facilities, and Intel is expected to name sites by the end of the year.

"We are well placed to make this an ecosystem-wide project, not just a couple of isolated paths in one member state," Slater said.

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

The EU wants to double its global share of chip production from 10 per cent to 20 per cent. For that it needs to attract at least one of the world's top three chip makers - TSMC, Intel or Samsung - to invest in new foundries.

In March, Intel CEO Pat Gelsinger announced that the company would invest about $20 billion, the same amount it's now bookmarked for the European project, on two new fabs in Arizona this year. These are part of the company's plans to make processors for other chipmakers based on their own designs.

Intel has largely focused on making its own chips in the past, but that is going to change with Intel's new and independent Foundry Services unit.

Intel currently operates four 'wafer fabs' in the US, in Massachusetts, Oregon, New Mexico and Arizona. It also has production factories in Israel and Ireland, as well as a single fab in China.

In May, Intel announced a $3.5 billion investment in 'chip-stacking', as part of efforts to lower its reliance on Asian companies.

In recent months, Gelsinger has met Italian Prime Minister Mario Draghi, French President Emmanuel Macron and German Chancellor Angela Merkel to discuss the impact of the ongoing chip shortage on companies across the world.

Following the meetings, Intel said that the European leaders were committed to rebalancing the semiconductor manufacturing landscape to make supply chains more resilient.

"What we are asking from the American and European governments is to allow it [the project] to be competitive for us here compared to Asia," Gelsinger said in an interview with the Politico Europe.

Reports say that Intel is seeking at least $9.7 billion (£7 billion) in public subsidies towards building a fab in Europe.

French government officials said that Intel was considering manufacturing 10nm technology or better at the new facility.

EU Commissioner Thierry Breton has said that Europe should seek to produce 2nm chips domestically in the future. Gelsinger met with Breton in May.