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Intel to Start European Fab Negotiations Next Week

Intel
(Image credit: Intel)

One of the key ingredients of Intel's IDM 2.0 strategy is to build numerous new fabs that will provide enough manufacturing capacity for Intel and its contractors. Typically, semiconductor facilities are built with support from governments and local authorities, so IDM 2.0 encompasses Intel's collaboration with various administrations. According to Reuters, next week Pat Gelsinger, CEO of Intel, will travel to Europe to discuss building a new fab in the EU.  

Gelsinger is expected to meet with European Union officials to discuss building a new semiconductor production facility as well as Europe-based customers, says a Reuters report that cites a statement by Intel. Intel did not say where it plans to locate its new fab. It is also unclear whether the head of Intel will meet with the company's existing customers, or potential clients that may outsource production of chips to Intel Foundry Services. 

Intel already has a fab in the European Union near Leixlip, Ireland. The site is currently being upgraded and will produce chips using the company's 7nm technology after the works are complete.  

Speaking of 7nm, it is necessary to note that Intel will have at least two 7nm-capable fabs in the near future (one in the U.S., the other in Ireland) with two additional EUV-capable facilities in Arizona coming online in the foreseeable future (2023 ~ 2024). Intel is also rumored to bring its 7nm node to its site near Kiryat Gat, Israel, though the details are yet to be confirmed. With multiple EUV fabs located in different parts of the world and plans to outsource some production to TSMC, Intel hardly needs another 7nm-capable facility in Europe. 

Yet, it is about time for Intel to start thinking about 3nm ~ 5nm-capable fabs. Such semiconductor production facilities will cost from $20 billion, so getting support and incentives from authorities is crucial. Keeping in mind the amount of money that Intel may need to build a post-7nm fab, it might make sense for the company to get financial support also from the EU rather than only from national governments. The latter will still need to provide some additional incentives, such as tax breaks.

To build a manufacturing facility in Europe, companies need multiple permissions from the local administrations, so Intel will have to work on multiple levels — the EU, national governments, local authorities — to build its new fab in the European Union. Apparently, the head of the company will start negotiations with the EU officials next week and from there the chip giant will go to other levels. 

  • InvalidError
    With ASML and other fab equipment manufacturers having manufacturing delays from chip shortages, I wonder how many of Intel's and everyone else's new or upgraded fabs will manage to come online in 2023.

    I hope chip fabs and their clients who design chips used in chip-making equipment are setting aside some capacity for chip-making equipment, otherwise the whole thing could end up in a runaway situation where shortages keep getting worse as the fights over available components intensify in the face of still increasing demand.
    Reply
  • Mpablo87
    Lots of negotiations with European authorities.
    But it can be profitable!
    Reply