Intel plans its own chip packaging factory in Europe

Munich The US chip giant Intel is thinking about spreading its planned billion-dollar investments in the EU over several locations. The chip packaging, which is very important for the group, could be done independently of the semiconductor production in its own plant, said development chief Ann Kelleher the Handelsblatt. “It doesn’t have to be done together in one place,” explained the manager.

Chip packaging is extremely important for Intel, said Kelleher. “This is a key element of our technology and an important part of our products.” The industry speaks of what is known as “packaging”. Different semiconductors are connected to one another in highly complex processes and combined in one housing.

For the world’s largest chip manufacturer, this would have the advantage that it could spread its investments over several countries and thus also receive subsidies from various governments.

The new Intel boss Pat Gelsinger announced in the spring that he would build several chip factories in the EU. Such a plant, in which the components are made on the basis of silicon wafers, costs around ten billion dollars. So far, Gelsinger has only mentioned in passing that Intel would also like to invest in the processing of semiconductors in Europe.

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The chip packaging is decisive for Intel in order to set itself apart from the competition, emphasizes development chief Kelleher: “We are leading.” In addition, Gelsinger recently brought up Intel’s own, new research location.

However, Gelsinger only wants to build in Europe if there is sufficient state support. In order to be able to keep up with Asia, a subsidy of around 40 percent is necessary. For a wafer factory, that’s about four billion dollars.

Ann Kelleher

The engineer from Ireland is responsible for the technological catch-up at Intel.

(Photo: via REUTERS)

The chip packaging is cheaper, but it is also a huge amount of money. In May, Intel announced that it would spend $ 3.5 billion on new factories in the US state of New Mexico.

Kelleher is one of Gelsinger’s closest confidants. The 60-year-old quickly replaced most of the former top management after taking office in February.

The Irish woman who hired Intel in 1996, on the other hand, was even promoted by the group owner: In mid-November, Gelsinger appointed the doctor of electrical engineering to one of seven Executive Vice Presidents. Your task: to lead Intel back to the top in terms of technology, i.e. to where the Taiwanese contract manufacturer TSMC currently stands.

In industry circles it is said that Germany can certainly hope for a settlement of Intel. Above all, Saxony and Bavaria are under discussion. In addition, Italy, France and Belgium are considered promising candidates. The chip industry is already significantly represented in these countries.

Intel already operates a large location in Ireland in the EU and is currently building a new plant there. The aim is to have a stronger presence on the continent in the future, Gelsinger explained several times.

Europe is part of a grand plan by Intel

The planned investments in Europe are part of a grand plan with which the CEO wants to make Intel the world’s most successful chip manufacturer again. Recently, competitors like AMD and Nvidia have been much more dynamic.

In contrast to Intel, the rivals do not operate any plants, but have TSMC manufacture them and thus have access to the most advanced technology in the world at the moment. Although Nvidia is significantly smaller than Intel, its rival on the stock market is now worth more than three times as much.

Pat Gelsinger

The Intel boss wants to get back to the top of the world technologically with state-of-the-art factories. But the engineer does not want to invest in Europe without subsidies.

(Photo: via REUTERS)

Kelleher believes that Intel is well on the way to technologically overtaking TSMC and thus also AMD and Nvidia. This should succeed in the middle of the decade. “We’re on the move faster than planned,” said the manager. Experts consider the race to catch up to be promising. “The technological lead in the chip industry is only ever enough for two or three years,” says Capgemini consultant Shiv Tasker.

The stock market, however, is skeptical. Following the latest quarterly figures, the price of Intel shares collapsed. The papers are listed below the value at the beginning of the year. Rival Nvidia more than doubled the price in the same period.

It remains to be seen whether the government grants in the EU will actually flow. Within the EU Commission, Internal Market Commissioner Thierry Breton and Vice President Margrethe Vestager disagree on whether the subsidies make sense. A vote from the EU Commission and national governments is therefore still pending. However, Intel has put itself under time pressure. Gelsinger has emphasized several times that he wants to make a decision by the end of the year.

More: Share price soaring: That makes Nvidia better than the competition.

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