A computer chip from Intel
The American chip manufacturer Intel will invest tens of billions of euros in its European chip production in the coming years. For example, there will be a new production location in Germany.
The announcement comes more than a month after the European Commission announced a new bill to stimulate the chip sector in the EU. Due to the persistent chip shortages, the EU wants to stand on its own two feet. Europe now accounts for 8 percent of global chip sales, which should be 20 percent by 2030.
Intel’s plans are the first concrete elaboration of the plans. The first investment round is worth more than EUR 30 billion. Ultimately, the company wants to invest around 80 billion euros in Europe this decade. The EU itself wants to invest around €43 billion in the sector this decade.
Financial support
“Intel has some catching up to do compared to its main competitors and with these investments, the company is catching up,” said Daniel Citroen. He follows the chip sector for ING. “The biggest challenge for Intel is to make sure production doesn’t get too expensive, which is something Samsung and TSMC have become very good at.”
Intel has been flirting with Europe for months, so that this step is being taken does not come as a big surprise. What is still unclear is how much money Intel expects to receive from national governments and the EU. In an online video explaining the plans, chief executive Pat Gelsinger said the “financial support” has yet to be completed. According to Citroen, factories in Europe are 30 to 40 percent more expensive than in Asia. “If you look at the amounts, you can imagine that Intel expects Europe to reimburse some of those extra costs.”
In any case, it is already clear that Brussels welcomes Intel with open arms: committee chairman von der Leyen was even in Intel’s online video to emphasize how important the step is by the American manufacturer. German Chancellor Scholz also welcomes Intel’s investment.
The German campus, with two factories, will be located in Magdeburg, between Hanover and Berlin. The company is “initially” investing 17 billion euros, the German government is said to have promised billions of euros in aid. The group also wants to expand its factory in Dublin, Ireland, which involves an amount of 12 billion euros. The Italian also has plans worth about 4.5 billion euros. Finally, France, Poland and Spain are also mentioned as places where it invests.
Remarkably enough, the Netherlands and Belgium were not mentioned in the overview. This while the Netherlands, with chip maker ASML, is the most important player in the world in the field of chip machines, and the research institute IMEC is located in Belgium. The IMEC and TU Delft are sometimes mentioned as places with which the company has had a relationship for many years.
The German chip sector is, among other things, focused on the automotive industry. It is obvious that Intel’s production facilities will contribute to this, for example the production of electric cars. The factories will not be finished until 2027. The plans are therefore not a solution for the acute chip shortages.
According to the Financial Times, the factory will focus on highly advanced chips – in technical terms 2 nanometers or smaller. The business newspaper notes that there are questions in the sector as to whether you really meet the wishes that exist there. “If you want to make the European industry independent, it is better to invest in 28 to 16 nanometers,” a high-ranking source in the European chip sector told NOS.
Space needed for ‘small village’
“It is not so strange that they choose Germany,” says Citroen. “There is already a lot of production there. In addition, you have to build a small village around such a factory. So you have to have the space for it and that is difficult in the Netherlands.”
But, he says at the same time, Intel could also have chosen to bring the research center that is now located in France to the Netherlands. It is obvious that ASML will probably earn a lot from all investments in the coming years. The Dutch group has a monopoly on the production of the most advanced chip machines.
