# Exclusive-Italy woos Intel over multibillion-euro chip plant -sources Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-10-22 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Rome Offers Intel Billions to Build Chip Plant in Italy Meta Description: Rome is set to entice Intel to invest in a multibillion-euro chipmaking plant in Italy, creating jobs and boosting the European industry. URL: https://financedigest.com/exclusive-italy-woos-intel-over-multibillion-euro-chip-plant-sourceshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-10-22t141517z4lynxmpeh9l0p0rtroptp4china-gaming-chinajoy-1736837531213-compressed.jpg) By Giulio Piovaccari and Giuseppe Fonte MILAN/ROME (Reuters) – Rome is drawing up an offer to try to convince Intel to invest billions of euros in an advanced chipmaking [plant](https://www.financedigest.com/frances-eramet-and-suez-pick-dunkirk-for-ev-battery-recycling.html) in Italy, as Germany emerges as frontrunner to land an even bigger megafactory planned by the U.S. company, three [sources](https://www.financedigest.com/exclusive-vodafone-looks-to-sell-2-3-billion-stake-in-indias-indus-towers-sources-say.html) said. The [plants would be part](https://www.financedigest.com/ford-to-invest-around-300-million-to-build-electric-car-parts-at-uk-plant.html "Ford to invest around 0 million to build electric car parts at UK plant") of a drive by the U.S. group to build cutting-edge manufacturing capacity in Europe to help [avoid future supply shortages of the kind currently crippling the automotive industry](https://www.financedigest.com/how-can-the-insurance-industry-avoid-having-a-kodak-moment.html "How can the insurance industry avoid having a ‘Kodak Moment?’") in particular. Rome is already in [talks with Intel about the potential](https://www.financedigest.com/virgin-orbit-says-space-startup-in-talks-with-potential-investors.html "Virgin Orbit says space startup in talks with potential investors") investment, which according to preliminary estimates would be worth more than 4 billion euro ($4.7 billion), the sources who are involved in the discussions said. One of them said the total could even [reach around 8 billion](https://www.financedigest.com/td-other-banks-reach-1-35-billion-settlements-to-end-stanford-litigation.html "TD, other banks reach .35 billion settlements to end Stanford litigation") euros, depending on Intel’s plans. They declined to be identified because the details are confidential. Rome is [ready to fund part of the overall investment with public money and offer](https://www.financedigest.com/g7-offers-9-5-billion-new-aid-for-ukraine-ready-with-more.html "G7 offers .5 billion new aid for Ukraine, ready with more") favourable terms to Intel, including on labour and energy costs, the [sources](https://www.financedigest.com/exclusive-vodafone-looks-to-sell-2-3-billion-stake-in-indias-indus-towers-sources-say.html) said. The factory would create more than 1,000 direct [jobs in Italy](https://www.financedigest.com/telecom-italia-in-talks-with-unions-on-up-to-2000-job-cuts-in-italy.html "Telecom Italia in talks with unions on up to 2,000 job cuts in Italy"), they added. The government is preparing a very detailed [offer with the aim of clinching a deal by the end of the year,” one of the sources](https://www.financedigest.com/credit-suisse-offers-higher-deposit-rates-in-asia-to-woo-the-wealthy-sources.html "Credit Suisse offers higher deposit rates in Asia to woo the wealthy – sources") told Reuters. Discussions with Intel are at an [advanced stage](https://www.financedigest.com/the-biopharmaceutical-market-to-be-at-the-technologically-advanced-stage.html "The Biopharmaceutical Market To Be At The Technologically Advanced Stage"). There is no deal yet, but if the government works hard on this it has a good chance of [bringing the plant](https://www.financedigest.com/edpr-brings-iberias-first-wind-solar-power-plant-on-stream.html "EDPR brings Iberia’s first wind-solar power plant on-stream") to Italy. Potential sites include Turin’s Mirafiori area, the Italian home of carmaker Stellantis, and Catania in Sicily, where French-Italian chipmaker STMicroelectronics already operates, the sources said. Intel declined to comment on its plans. The U.S. group’s biggest project in Europe is a planned megafactory, where Dresden in Germany has emerged as a [leading candidate](https://www.financedigest.com/moderate-bosniak-candidate-leads-in-race-for-presidency-seat.html "Moderate Bosniak candidate leads in race for presidency seat") site, the sources said. They are not directly involved in talks about the choice of site for the megafactory. No final decision has been made for either site and [plans could change](https://www.financedigest.com/exclusive-olympics-paris-2024-plans-games-relay-changes-fewer-torches-source.html "EXCLUSIVE-Olympics-Paris 2024 plans Games relay changes, fewer torches-source") in the coming weeks, the sources said. FROM U.S. TO EU The Italian factory would be an [“advanced packaging” plant that uses new technologies](https://www.financedigest.com/cardiac-valvulotome-market-growth-latest-trends-top-players-competition-technological-advancements-outlook-and-forecast-2028.html "Cardiac Valvulotome Market Growth, Latest Trends, Top Players, Competition, Technological Advancements, Outlook and Forecast 2028") to weave together full chips out of tiles produced by Intel and other chipmakers, the sources said. Intel is using the technology to draw in new customers such as Amazon.com Inc’s [cloud computing](https://www.financedigest.com/enterprise-training-and-the-future-of-cloud-computing.html "Enterprise Training and the Future of Cloud Computing") unit, but its only sites are in the United States. [France is also seen](https://www.financedigest.com/the-logo-of-french-cloud-computing-company-ovhcloud-is-seen-on-a-data-center-building-in-strasbourg-france-october-13-2021-reuters-christian-hartmann.html "The logo of French cloud computing company OVHcloud is seen on a data-center building in Strasbourg, France, October 13, 2021. REUTERS/Christian Hartmann") as contender for the megafactory, while Italy faces competition from Poland, where Intel also has a presence, for the packaging facility. Intel CEO Pat Gelsinger said last month the company would announce the locations of two major new EU chip fabrication [plants by year-end as it looks to spend 80 billion euros](https://www.financedigest.com/germanys-merck-to-invest-300-million-euros-in-us-gas-plant.html "Germany’s Merck to invest 300 million euros in US gas plant") over the next decade on the continent. CHIPS ARE DOWN The [plans come as the European Union aims to reduce its dependence on semiconductor supplies from the United States and China](https://www.financedigest.com/dutch-responds-to-us-china-policy-with-a-plan-to-curb-semiconductor-tech-exports.html "Dutch responds to US China policy with a plan to curb semiconductor tech exports"), and the chip supply crisis shows no signs of abating. Chipmakers are scrambling to boost output after the work-from-home trend during the pandemic led to explosive [demand for consumer](https://www.financedigest.com/lights-maker-signify-cuts-annual-outlook-on-lower-consumer-demand-china-woes.html "Lights maker Signify cuts annual outlook on lower consumer demand, China woes") electronics such as smartphones and computers. The shortages have [hit the automotive industry – a major pillar of the European economy – the hardest](https://www.financedigest.com/digital-divide-hits-rural-black-americans-hardest.html "‘Digital divide’ hits rural Black Americans hardest"), as chipmakers have generally preferred consumer electronics customers because they buy more advanced, higher-margin chips. Italian Prime Minister Mario Draghi said this week the EU needed to act “now and decisively” to increase output to meet its [target](https://www.financedigest.com/toyotas-july-global-vehicle-output-drops-again-puts-annual-target-in-doubt.html "Toyota’s July global vehicle output drops again, puts annual target in doubt") of producing 20% of the world’s semiconductor output by 2030. “China and the U.S. are already [investing tens of billions](https://www.financedigest.com/shell-to-evaluate-25-billion-pound-british-investments-after-windfall-tax.html "Shell to ‘evaluate’ 25 billion pound British investments after windfall tax") each in this sector,” he said. Still, [building the megafactory and packaging plant](https://www.financedigest.com/bosch-to-build-215-million-plant-in-central-mexico.html "Bosch to build 5 million plant in central Mexico") will take years and is unlikely to help European automakers in the short term. For that, Gelsinger has said [Intel plans to reserve capacity at its chip](https://www.financedigest.com/intel-wants-5-billion-more-in-german-subsidies-for-chip-plant-bloomberg-news.html "Intel wants billion more in German subsidies for chip plant – Bloomberg News") factory in Ireland for automakers and help them shift to using its technology, but that too could take time. GERMANY IN THE LEAD [Talks could speed up after a new government is formed in Germany](https://www.financedigest.com/exclusive-germany-qatar-at-odds-over-terms-in-talks-on-lng-supply-deal-sources.html "Exclusive-Germany, Qatar at odds over terms in talks on LNG supply deal -sources"), following September’s federal elections. The EU’s biggest economy, with a large [car industry](https://www.financedigest.com/german-new-passenger-car-registrations-up-3-in-august-industry-source.html "German new passenger car registrations up 3% in August – industry source"), is in the lead to land the “megafab” [plant,](https://www.financedigest.com/frances-eramet-and-suez-pick-dunkirk-for-ev-battery-recycling.html) the sources said, though France remains in the running. One of the sources said Italy also had “cards to play” to obtain a [research centre](https://www.financedigest.com/britains-prince-charles-to-open-new-astrazeneca-research-centre.html "Britain’s Prince Charles to open new AstraZeneca research centre"), which is another part of the overall investment Intel is preparing for Europe. ($1 = 0.8593 euros) (Additional reporting by Stephen Nellis in [San Francisco](https://www.financedigest.com/paul-jasper-joins-rimon-laws-san-francisco-office-as-partner.html "Paul Jasper joins Rimon Law’s San Francisco Office as Partner") and Angelo Amante in Rome; Writing by Giulio Piovaccari; Editing by Josephine Mason and Mark Potter) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---