Intel pours €30bn into chip manufacturing in Europe

Intel announced on Tuesday plans to invest around 30 billion euros to strengthen chip production in Europe, noting the launch of an expensive proposal, backed by taxpayers, to bounce the continent to the forefront of advanced chip production.

The ambitious plan is designed to make the EU at least dependent on Asian chipmakers, while supporting a new technological base in advanced chips that will compete with the US and Asia.

However, the effort has led to complaints from some European chipmakers, which cast doubt on whether it will produce chips that meet the needs of European industry. They are also deterred by the prospect of a share of more than € 43 billion in chip subsidies Recently confirmed By spending the EU on a shiny new venture from an American rival.

Of Intel Investment plans Include € 17 billion for a huge new product, or manufacturing plant, in the German city of Magdeburg using the most advanced chip manufacturing technology.

Together with related manufacturing and research efforts in France, Ireland, Italy, Poland, Belgium and Spain, the plant is the center of a decade-long investment program that could eventually cost € 80 billion, subject to demand and availability of future subsidies.

The American company has also confirmed that it is investing € 12 billion in an existing facility in Ireland that operates on less advanced technology, bringing the total investment there since 1989 to € 34 billion.

Patrick Glazinger
Intel CEO Pat Glaser: “This is exactly the right thing to do. We are not going to be dominated by the near-term outlook of the Wall Street Quarterly “© David Paul Morris / Bloomberg

The German plant is expected to eventually absorb tens of billions of euros in aid, although Intel CEO Pat Glasinger told the Financial Times that the exact amount has not yet been finalized.

Germany is expected to soon approve billions of euros in government aid for the plant. France has also signaled support for Intel’s plan to turn the Saclay technology cluster outside of Paris into its European R&D headquarters, with 1,000 researchers focusing on artificial intelligence and high-performance computing. Italy is negotiating terms for a 4.5 billion-euro Intel packaging plant In turning the finished chips in part from the German facility into final products.

Magdeburg’s “mega fab”, which is scheduled to start operating in 2027, is designed to produce chips with features two nanometers wide or less – a miniaturization that Intel and its main rivals, TSMC and Samsung, hope to put into production elsewhere for the first time by 2025.

It represents a gamble that American society, after all waste Its long-standing leadership and severe decline behind its Asian competitors, can return to the forefront of the most technologically advanced and technologically complex manufacturing industry.

In a sign that investors are still unconvinced, Intel’s battered shares have fallen 25 percent since Glasinger became CEO early last year. He rejected the company’s weak share price in response to the heavy spending it faces.

“It’s not a very friendly Wall Street post. And it’s exactly the right thing to do,” Glasinger said. “We are not dominated by the near – term view of Wall Street Quarterly. “

The political leaders of the European Union, meanwhile, have not hidden the scope of their ambitions.

After seeing the continent’s share of global production fall below 10 percent, the Magdeburg plant is at the heart of the proposal to use the most advanced technology to return to 20 percent by the end of the decade. “When we were negotiating with the Europeans, there was a great sensitivity to go two nanometers and below,” Glasinger said.

Some European executives have said that chips manufactured using the most advanced manufacturing techniques, best suited for high-volume and low-power uses such as smartphones and servers, will not suit the needs of European industry.

Instead, they said, the investment should be aimed at improving energy efficiency and other aspects of the older nodes used by manufacturers like automakers.

“The narrative that everything will converge to at least five nanometers is a false statement,” said one industry executive. “The major innovation of the automotive industry is taking place at mature nodes. They need to be very energy efficient and safe.”

“This is the fastest growing segment of semiconductors,” said another senior official. “The EU should support domestic production.”

According to Glasinger, the new brand is precisely geared to Europe’s future needs. “It takes many years to build these facilities,” he said, signaling that the plant would not help solve the existing chip shortage. He added that the chips from Intel’s plant will be well-suited for electric vehicles and self-driving technology that will greatly increase the demand of silicon automakers in the coming years.

Peter Wenink, CEO of ASML, the Dutch company whose equipment plays a key role in the production of the most advanced chips, said Intel’s investment in advanced technology “will act as a magnet for innovation” and help ensure Europe does not become irrelevant in the chip.

But he added that the current shortage of chips has shown the need for advancement in even more mature technologies and that government assistance is needed to help offset the higher costs of building new plants in Europe. “It needs to step up. Just one fantasy will not cause it,” he said.

However, Thierry Burton, the EU internal market commissioner who was the driving force behind Europe’s chip ambitions, said EU taxpayers should not fund mature technologies.

“Some of the chip companies probably thought it was a good opportunity for them to have access to public money to improve their production… Because the demand exists,” he said. “I have always been very clear. We are not here to do your job. We will not invest public money for it. We need to prepare advanced technology.”

Another report by Joe Miller

Intel pours €30bn into chip manufacturing in Europe Source link Intel pours €30bn into chip manufacturing in Europe

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