On March 15, 2022, Intel announced its plans of investing up to 17 billion euros into a semiconductor fab mega-site in Germany. The move is part of Intel’s initial plan of committing up to $88 billion in Europe over the next decade including setting up a new R&D and design hub in France and investing in R&D, manufacturing and foundry services in Ireland, Italy, Poland and Spain. “Our planned investments are a major step both for Intel and for Europe. The EU Chips Act will empower private companies and governments to work together to drastically advance Europe’s position in the semiconductor sector. This broad initiative will boost Europe’s R&D innovation and bring leading-edge manufacturing to the region for the benefit of our customers and partners around the world. We are committed to playing an essential role in shaping Europe’s digital future for decades to come,” said Pat Gelsinger, Intel CEO in an announcement.
This comes barely a month after the EU unveiled a $49 billion plan to address chip shortages. EU being home to world-class universities and research institutions, Intel’s intervention will act as a catalyst in propelling the region’s infinite capabilities in tech and manufacturing. Apart from being a tectonic shift in the EU’s chip manufacturing industry, Intel’s massive investments are part of a plan to clamp down the EU’s reliance on Asian markets for chip supply.
In light of the Covid-19 pandemic, chip shortages have been experienced globally. EU markets are some of the most hit as they transform to different technologies such as mass production of EVs which require a sufficient supply of chips and other related products.
The plant is to be set up in Magdeburg, Germany and is expected to employ 7,000 workers in the course of construction and 3,000 full-time tech employees once operational. Intel chose Germany as the ideal location citing superb infrastructure, top talent, and an existing ecosystem of suppliers as the major reasons. Construction is set to begin in the first half of 2023 and production will come online in 2027.
The new hub, to be named Silicon Junction, will begin producing Intel’s next-generation (Intel 20A and Intel 18A nodes) semiconductors as part of its new chip architecture roadmap. Intel’s investments will not only help strengthen the EU’s world-class innovation capabilities but also support EU’s green transition.