According to sources, Italy is nearing agreement with Intel to develop an advanced semiconductor packaging and assembly facility there for an initial investment of $5 billion.
The U.S. chipmaker’s investment in Italy is a part of a larger strategy it unveiled earlier this year to invest $88 billion in expanding capacity throughout Europe. Intel is attempting to reduce its reliance on Asian chip imports and ease a supply shortage that has slowed production in the crucial auto industry in the area.
The sources, who requested anonymity owing to the delicate nature of the situation, claimed that the administration of outgoing Prime Minister Mario Draghi was seeking to reach a deal by the end of August in order to hold a special election on September 25.
According to sources previously cited by Reuters, Rome is prepared to contribute up to 40% of Intel’s overall investment in Italy, which is anticipated to grow over time from the initial $5 billion.
The Intel factory would weave entire chips made of tiles together using innovative technology.
According to the individuals, Intel and the government have narrowed down a list of potential sites in two Italian provinces; one of them said that the locations are in Piedmont and Veneto’s northern regions.
According to both sources, a final choice has not yet been made on the location of the facility. Initially, the areas of Sicily, Lombardy, and Apulia were also taken into consideration.
It’s not yet known how much Intel will contribute overall or how Italy would pay for its portion of the investment.
Early this year, the European Commission declared that it has made available 15 billion euros in additional public and private investment by 2030 under the so-called Chips Act, which aims to finance innovative semiconductor facilities. This comes on top of the 30 billion euros in public investments that NextGenerationEU, Horizon Europe, and national budgets have previously planned.
Rome has allocated 4.15 billion euros up to 2030 for the purpose of luring chipmakers and funding fresh industrial uses for cutting-edge technologies.
The government is also in contact with Israeli Tower Semiconductor, which Intel just acquired, French-Italian STMicroelectronics, Taiwan chipmakers MEMC Electronic Materials Inc. and TSMC, and Taiwan-based STMicroelectronics. STMicroelectronics and GlobalFoundries agreed to establish a semiconductor facility in France for $5.7 billion last month.
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