Intel considered a packaging plant in Italy after the election • The Register

As Intel looks to expand its newly launched foundry empire, the x86 giant’s next chip fab could be an advanced packaging facility in northern Italy.

Citing people familiar with the matter, Reuters reports today that the city of Vigasio, roughly halfway between Milan and Venice, is Intel’s preferred location for its next European chip fab. The facility is reportedly preferred for its proximity to the Brenner Autobahn, which connects Italy and Austria across the Alps, over which Intel can transport chips built at its Magdeburg factory in Germany.

In the past year, Intel worked out plans build a vast network of semiconductor R&D, design, packaging and manufacturing centers across Europe to compete more directly with companies like TSMC and Samsung Electronics on a global scale. The Italian job comes after extensive negotiations with the locals.

The Italian government could end up funding up to 40 percent of the plant if a deal negotiated with the outgoing government of Mario Draghi for the Vigasio site goes ahead newly elected far right Prime Minister Giorgia Meloni.

The location in the north-eastern Veneto region is therefore not a safe choice for the American chipmaker, according to Reuters, as the new government may have something to say about it. However, we’re told that Draghi’s aides are negotiating behind the scenes with Rome’s closest leaders to ensure the deal with Intel remains intact.

While it remains unclear how much the facility will ultimately cost, like most things related to chip manufacturing, it will likely be a multi-billion dollar affair. Intel said it would spend around US$7 billion to build a packaging plant in Malaysia late last year.

If Italy’s new leadership moves forward with the packaging plant, it is hoped the plant will employ 1,500 people and create up to 3,500 jobs – likely in utility and construction-related fields – in the region once the plant comes online between 2025 and 2027, Reuters reports. Intel said this assembly line will cost at least 4.5 billion euros ($4.3 billion).

Intel’s interest in Vigasio may be due in part to its proximity to Milan, home of Tower Semiconductor’s Italian facilities. Intel acquired Tower, an Israel-based foundry operator, in February for $5.4 billion. This acquisition significantly expands Intel’s foundry services portfolio to include legacy process nodes, said Randhir Thakur, president of Intel Foundry Services recently said The registry.

Should plans for Vigasio fall through, Intel could potentially fall back on Lombardy, Puglia and Sicily as alternative locations for the plant, as it previously had those three in mind.

The reported location and tentative deal with the Italian government shed new light on Intel’s planned European expansion.

This spring, the x86 Titan announced it spend 17 billion euros for the construction of a chip factory in Germany. The “Megafab” is located in Magdeburg, west of Berlin; scheduled to go online by 2027; and will be responsible for the production of Intel’s most advanced process technology.

This project is part of a larger €33 billion ($36 billion) investment in which the chipmaker plans to expand its operations in Ireland and R&D, design and packaging facilities in France, Poland, Italy and Spain to build.

Intel declined to comment on the report. ® Intel considered a packaging plant in Italy after the election • The Register

Laura Coffey

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