Intel plans to invest in Europe
On March 15, technology giant Intel said it would spend 17 billion euros ($19 billion) to create two new chip factories in the northeast of the city of Magdeburg, Germany. Intel said that construction will begin in the first half of 2023 and go into manufacturing in 2027, and intends to turn this place into the new “Silicon Junction” as long as there are no legal problems. The new factories will supply chips using Intel’s most advanced transistor technology for Intel customers as well as the company’s own products.
Intel currently employs about 10,000 people across the European Union. With an initial wave of investments of more than 33 billion euros ($36 billion), Intel is expected to create about 5,500 jobs at the company, along with thousands one in construction as well as in its suppliers and partners.
Intel CEO Pat Gelsinger said the plan will drive Europe’s R&D innovation and bring leading-edge manufacturing to the area. The company plans to pour money into every process of the chip supply chain – including research, production and packaging – with investments in France, Ireland, Italy, Poland and Spain as well.
Chip shortages and actions of the European Government
A severe shortage of semiconductors has plagued technology companies and carmakers over the past year as economies reopened after the pandemic and demand for goods increased.
In October, Germany’s Volkswagen said a severe chip shortage caused by the pandemic had slashed its third-quarter profit by 12%. That same quarter, Stellantis, maker of many car brands including Fiat and Citroën, said it produced about 600,000 fewer cars than it did in the same period last year due to chip shortages.
Recently, the European Commission has stepped up efforts to secure chip supplies. In February, the Commission said it planned to pour 43 billion euros ($47 billion) in investments into the industry as part of The EU Chips Act . The law, announced last month, allows for an additional 15 billion euros in public and private investment through 2030.
Currently, the European Union accounts for about 10% of the global chip market, but this figure could rise to 20% by 2030 if the Act is passed, the Commission said in its proposals. According to Mr Gelsinger, the EU Chips Act will empower private companies and governments to work together to enhance Europe’s position in the semiconductor sector.
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