Italy ‘Negotiating With Intel’ Over 4bn Euro Chip Plant

Italy is reportedly negotiating with Intel to convince it to build a 4 billion euro (£3.4bn) advanced chip packaging plant in the country, as the company pushes ahead with major expansion plans within the EU.

The plant could be worth more than 4bn euros or up to 8bn euros, Reuters reported, citing unnamed sources.

Italy is reportedly prepared to fund part of the overall investment in the plant and offer other favourable terms to Intel, including on labour matters and energy costs.

The plant would employ more than 1,000 people directly in Italy, the report said.

Negotiations

A Reuters source said the Italian government was preparing a “very detailed offer” and was aiming to confirm a deal by the end of this year.

The report said discussions were at an “advanced stage” but that no agreement had yet been reached.

Possible sites reportedly include the Mirafiori district of Turin, the Italian base of carmaker Stellantis, and Sicily’s Catania, where French-Italian chipmaker STMicroelectronics already has operations.

Italy is also reportedly hoping to land an Intel research centre, which is part of the overall investment the company is planning for Europe, and has “cards to play” on that deal, the report said.

Intel declined to comment on its plans.

Advanced packaging

Those two planned facilities are distinct from an even larger chip fabrication plant also intended for the bloc, and for which Germany is seen as the frontrunner.

Dresden has emerged as a leading candidate for this megafactory, but no final decision has been made for either site.

The Italian negotiations centre around a plant for advanced chip packaging that Intel wants to build in Europe.

Advanced packaging involves the assembly of multiple tiles into a single unit to increase performance, power, cost and other properties.

Unlike a single system-on-a-chip (SoC), advanced packaging technology allows a chipmaker to mix and match different types of technologies on tiles that can be sourced from different foundries.

Advanced packaging is a key part of the IDM 2.0 comeback strategy Intel announced in March.

Chip shortage

To date the company’s only advanced packaging plants are located in the US.

France is a leading rival with Germany for the megafactory, while Poland is competing with Italy for the advanced packaging plant.

Intel chief executive Pat Gelsinger said last month the company planned to announce the locations of two major EU chip plants by the end of the year as it prepares to spend 80bn euros on the continent in the next decade.

Intel’s plans to build chipmaking capacity within the EU coincide with an effort by the region to reduce its dependence for microprocessors on the US and Asia, amidst a chip shortage that is having a particularly damaging effect on the critical car industry.