American chip-making giant Intel said on Tuesday it planned to invest tens of billions of euros in the European Union, as the continent seeks to reduce its reliance on semiconductors from Asia.
The project to boost the entire production process, from the research of new technologies to the manufacturing and packaging of semiconductors, could total up to €80 billion ($87.9 billion) over the next decade, the group said in a statement.
The production of the key technology, also known as chips, has become a strategic priority in Europe as well as the United States, after the shock of the pandemic choked-off supply, bringing factories to a standstill and emptying stores of products.
The details of the announcement were hotly anticipated in Europe, where governments have been jostling to host new production facilities as the continent seeks to reduce its dependence on Asian chip imports. Earlier this year the EU put forward the Chips Act, a €43 billion plan to boost production on the continent of the component, used in everything from electric vehicles to wind turbines.
Speaking at the Intel launch event, European Commission President Ursula von der Leyen said the US group’s announcement was the “first major achievement” of the act.
The ambitious push sets the aim for the EU to make up 20% of global semiconductor production by 2030, roughly doubling its current market share.
Intel’s planned investments, spanning the EU, from Spain to Poland, “addresses the global need for a more balanced and resilient supply chain”, according to CEO Pat Gelsinger.
Semiconductors were “more critical than ever”, and the “brains powering essential digital technologies”, he said in a press conference.
The first phase of the plan would total €33 billion, the group said in a statement.
The cornerstone of the “landmark” investment was a €17 billion “mega site” in the eastern German city of Magdeburg.
Intel plans to begin building the manufacturing hub in the “first half of 2023” with production to begin as soon as 2027 at the site employing 3,000 people.
Germany is already home to Europe’s densest network of semiconductor production, including groups such as Bosch or Infineon.
But the choice of Magdeburg over more established centres like Dresden came as something of a surprise, with the US group valuing the city’s strategic location at the crossroads between other European manufacturing centres across the country.
Published in The Express Tribune, March 16th, 2022.
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