Rome Coaxes Intel Into €4B - €8B Chip Plant Investment: Reuters

·2 min read
  • Rome is cajoling Intel Corp (NASDAQ: INTC) to invest billions of euros in an advanced chipmaking plant in Italy, Reuters reports.

  • The Italian factory would be an "advanced packaging" plant that uses new technologies to manufacture whole chips out of tiles produced by Intel and other chipmakers.

  • Rome is already in talks with Intel about the potential investment, rumored at over €4 billion ($4.7 billion), reaching up to €8 billion, the report adds.

  • The factory would create over 1,000 direct jobs in Italy.

  • Interestingly, Germany emerged as the frontrunner to land an even bigger mega factory planned by Intel to counter the global chip crisis that has especially endangered the auto sector.

  • France is also a contender for the mega factory, while Italy faces competition from Poland, where Intel also has a presence for the packaging facility.

  • Rome is ready to partly fund the overall investment with public money and offer favorable terms to Intel, including labor and energy costs.

  • The potential sites include Turin's Mirafiori area, the Italian home of carmaker Stellantis NV (NYSE: STLA), and Catania in Sicily, where French-Italian chipmaker STMicroelectronics NV (NYSE: STM) already operates.

  • Intel CEO Pat Gelsinger aims to announce the locations of two major new EU chip fabrication plants by year-end as it looks to spend €80 billion over the next decade on the continent.

  • Intel plans to reserve capacity at its chip factory in Ireland for automakers and help them shift to using its technology.

  • Italian Prime Minister Mario Draghi emphasized initiatives to increase output to meet its target of producing 20% of the world's semiconductor output by 2030.

  • Italy could also obtain a research center as another part of the overall investment Intel is preparing for Europe.

  • Also Read: Why Intel Shares Crashed After-Hours Today

  • Price Action: INTC shares traded lower by 10.6% at $50.09 on the last check Friday.

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