Intel is close to signing a deal with the Italian government to set up subsidized chip factories within the Mediterranean country. According to Reuters sources, the deal will bring in $5 billion of investment from Intel initially. In turn, Rome will help with funding the developments, contributing as much as 40% of costs as well as offering other financial benefits. It is expected the deal will be made public by the end of August.
As with the German and French Intel ventures, multiple Italian locations put themselves forward for Intel’s investment. Initially Apulia, Lombardy, Piedmont, Sicily and Veneto regions were contenders. However, the unnamed multiple sources say that the two northern regions of Piedmont and Veneto have won out.
The purposes of the two Intel factories destined for Italy are expected to be advanced semiconductor packaging and assembly. The broader plan is to set up a full range of facilities with the German mega site (two fabs) confirmed for Magdeburg producing Intel 20A and better chips by 2027, as well as French R&D (in Plateau de Saclay) and Semiconductor Design hubs.
We don’t know how much Intel is prepared to invest in total, nor exactly how much support it will get from the Italian government over the full project. A report back in March suggested that the Italian enticements had grown to €4 billion ($4.5 billion). Furthermore, extra money could be forthcoming from a mix of EU Chip Act funds and local government, over the project’s length.
Intel is looking to decrease its reliance on East Asia, largely due to geopolitics. In Europe it is taking advantage of the EU Chips Act, much like it has now gone full-steam ahead in the US as the US Chips and Science Act (and funding plans) has been approved.
There are some interesting aspects to the timing of this investment. Incumbent Prime Minister Mario Draghi is working to get the Intel deal signed and sealed by the end of August. There is a snap general election scheduled for September 25, and perhaps some Intel investments could help voters look at the existing government party and its allies favorably.