European nations battle to bag some of Intel's billions
(2022/03/02)
- Reference: 1646208191
- News link: https://www.theregister.co.uk/2022/03/02/european_intel_funding/
- Source link:
Intel's doing a European version of [1]Amazon HQ2 : enticing governments to pledge more and more funds to subsidize the construction of chip mega-plants along with ever-growing packages of benefits.
Recent [2]reports have placed Germany and Italy as potential spots for new Intel super-fabs. Italy is now [3]reportedly establishing a $4.6bn fund to lure Intel and its chipmaking to the nation.
The EU has noted that the continent doesn't have an advanced chip manufacturing industry like that of Asia or the US. Meanwhile, Intel has said it is [4]looking to establish leading-edge fabs in Europe with investments potentially reaching €80bn.
[5]
Germany has an advanced economy with high-skilled labor, and companies such as GlobalFoundries already have manufacturing operations in Dresden. Italy, meanwhile, to some may not be a natural choice to establish a semiconductor fab, yet Intel is in the [6]midst of a $5.4bn acquisition of Tower Semiconductor, which has factories in Italy, America, and Japan.
[7]
[8]
Tower's Italy facility is near Milan, where ST Microelectronics is also establishing a factory to make chips for applications such as power management. The STM fab is expected to start production this year.
New opportunities
Intel has yet to make a final call of where it will build its next European plants, though it has a knack at delivering surprises, and a fab could pop up anywhere, said Jim McGregor, principal analyst at Tirias Research.
"Who would have thought Intel would've been establishing a fab in Ohio," McGregor said, referring to the $20bn commitment made by the company to open component factories near Columbus in the US state.
Semiconductor plants are lucrative businesses that can uplift the surrounding economy to an extent, much like automotive manufacturing or aircraft assembly. Governments are going all out to invite Intel, and in some cases it may be better for the company to select an area where it can build from scratch rather than extend an already operational facility, McGregor said.
[9]
The recently proposed [10]European Chips Act has a goal to strengthen the EU's electronics supply chain with steps that include boosting domestic semiconductor manufacturing capacity. The draft law will pool together €11bn of public investments to fund this.
[11]Intel selects German city for EU semiconductor plant
[12]EU digital sovereignty: Cloud players unconvinced
[13]Chip CFOs get a crash course in silicon geopolitics
[14]EU directs €11bn toward European Chips Act to build homegrown semiconductor industry
Intel, for its part, is looking to redraw the semiconductor manufacturing map, and tapping European countries to cut their reliance on Asian countries. Over the past 30 years, semiconductor manufacturing drifted away from America and Europe to Asia, which is now making 80 per cent of the world's chips.
"My moonshot is that by the end of this decade, the US would have gone from 12 per cent to 30 per cent, Europe from nine per cent to 20 per cent [of manufacturing capacity]," Intel CEO Gelsinger [15]said at last month's investor day meeting.
Intel already has factories in Ireland, and is expanding operations there.
Capital expenditure by semiconductor companies is expected to reach an all-time high of $190.4bn, up from $153.9bn this year, [16]according to a study by IC Insights released on Monday.
[17]
The funds will largely go into establishing new factories, with TSMC leading the pack with a $42.4bn commitment in 2022, a 40 per cent increase from 2021. Intel was second, with a $27.4bn commitment, growing by 44 per cent compared to 2021.
As for anyone wondering about the effects of Russia's invasion of Ukraine: "We do not believe that the war in Ukraine will have an effect on the semi fab investments in Europe as these are long term strategies," Bill McClean, president at IC Insights, told The Register . "If the war would extend to NATO countries in Europe, things may be different." ®
Get our [18]Tech Resources
[1] https://www.theregister.com/2017/09/07/amazons_hq2_decision/
[2] https://www.theregister.com/2022/02/28/intel_magdeburg_chip_fab/
[3] https://www.reuters.com/world/europe/italy-plans-45-bln-fund-boost-domestic-chipmaking-innovative-technologies-draft-2022-03-01/
[4] https://www.intel.com/content/www/us/en/newsroom/news/intel-mobileye-iaa-mobility.html
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Yh9OWbHMi68fG@NF903HaQAAAMg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[6] https://www.theregister.com/2022/02/15/intel_buys_tower_semiconductor/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yh9OWbHMi68fG@NF903HaQAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Yh9OWbHMi68fG@NF903HaQAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yh9OWbHMi68fG@NF903HaQAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2022/02/08/european_chips_act/
[11] https://www.theregister.com/2022/02/28/intel_magdeburg_chip_fab/
[12] https://www.theregister.com/2022/02/17/france_eu_sovereignty/
[13] https://www.theregister.com/2022/02/15/global_cfo_semiconductors/
[14] https://www.theregister.com/2022/02/08/european_chips_act/
[15] https://www.theregister.com/2022/02/18/intel_gelsinger_plan/
[16] https://www.icinsights.com/news/bulletins/Semi-Industry-Capex-Forecast-To-Jump-24-And-Reach-Over-190-Billion-This-Year/
[17] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Yh9OWbHMi68fG@NF903HaQAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[18] https://whitepapers.theregister.com/
Recent [2]reports have placed Germany and Italy as potential spots for new Intel super-fabs. Italy is now [3]reportedly establishing a $4.6bn fund to lure Intel and its chipmaking to the nation.
The EU has noted that the continent doesn't have an advanced chip manufacturing industry like that of Asia or the US. Meanwhile, Intel has said it is [4]looking to establish leading-edge fabs in Europe with investments potentially reaching €80bn.
[5]
Germany has an advanced economy with high-skilled labor, and companies such as GlobalFoundries already have manufacturing operations in Dresden. Italy, meanwhile, to some may not be a natural choice to establish a semiconductor fab, yet Intel is in the [6]midst of a $5.4bn acquisition of Tower Semiconductor, which has factories in Italy, America, and Japan.
[7]
[8]
Tower's Italy facility is near Milan, where ST Microelectronics is also establishing a factory to make chips for applications such as power management. The STM fab is expected to start production this year.
New opportunities
Intel has yet to make a final call of where it will build its next European plants, though it has a knack at delivering surprises, and a fab could pop up anywhere, said Jim McGregor, principal analyst at Tirias Research.
"Who would have thought Intel would've been establishing a fab in Ohio," McGregor said, referring to the $20bn commitment made by the company to open component factories near Columbus in the US state.
Semiconductor plants are lucrative businesses that can uplift the surrounding economy to an extent, much like automotive manufacturing or aircraft assembly. Governments are going all out to invite Intel, and in some cases it may be better for the company to select an area where it can build from scratch rather than extend an already operational facility, McGregor said.
[9]
The recently proposed [10]European Chips Act has a goal to strengthen the EU's electronics supply chain with steps that include boosting domestic semiconductor manufacturing capacity. The draft law will pool together €11bn of public investments to fund this.
[11]Intel selects German city for EU semiconductor plant
[12]EU digital sovereignty: Cloud players unconvinced
[13]Chip CFOs get a crash course in silicon geopolitics
[14]EU directs €11bn toward European Chips Act to build homegrown semiconductor industry
Intel, for its part, is looking to redraw the semiconductor manufacturing map, and tapping European countries to cut their reliance on Asian countries. Over the past 30 years, semiconductor manufacturing drifted away from America and Europe to Asia, which is now making 80 per cent of the world's chips.
"My moonshot is that by the end of this decade, the US would have gone from 12 per cent to 30 per cent, Europe from nine per cent to 20 per cent [of manufacturing capacity]," Intel CEO Gelsinger [15]said at last month's investor day meeting.
Intel already has factories in Ireland, and is expanding operations there.
Capital expenditure by semiconductor companies is expected to reach an all-time high of $190.4bn, up from $153.9bn this year, [16]according to a study by IC Insights released on Monday.
[17]
The funds will largely go into establishing new factories, with TSMC leading the pack with a $42.4bn commitment in 2022, a 40 per cent increase from 2021. Intel was second, with a $27.4bn commitment, growing by 44 per cent compared to 2021.
As for anyone wondering about the effects of Russia's invasion of Ukraine: "We do not believe that the war in Ukraine will have an effect on the semi fab investments in Europe as these are long term strategies," Bill McClean, president at IC Insights, told The Register . "If the war would extend to NATO countries in Europe, things may be different." ®
Get our [18]Tech Resources
[1] https://www.theregister.com/2017/09/07/amazons_hq2_decision/
[2] https://www.theregister.com/2022/02/28/intel_magdeburg_chip_fab/
[3] https://www.reuters.com/world/europe/italy-plans-45-bln-fund-boost-domestic-chipmaking-innovative-technologies-draft-2022-03-01/
[4] https://www.intel.com/content/www/us/en/newsroom/news/intel-mobileye-iaa-mobility.html
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Yh9OWbHMi68fG@NF903HaQAAAMg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[6] https://www.theregister.com/2022/02/15/intel_buys_tower_semiconductor/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yh9OWbHMi68fG@NF903HaQAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Yh9OWbHMi68fG@NF903HaQAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yh9OWbHMi68fG@NF903HaQAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2022/02/08/european_chips_act/
[11] https://www.theregister.com/2022/02/28/intel_magdeburg_chip_fab/
[12] https://www.theregister.com/2022/02/17/france_eu_sovereignty/
[13] https://www.theregister.com/2022/02/15/global_cfo_semiconductors/
[14] https://www.theregister.com/2022/02/08/european_chips_act/
[15] https://www.theregister.com/2022/02/18/intel_gelsinger_plan/
[16] https://www.icinsights.com/news/bulletins/Semi-Industry-Capex-Forecast-To-Jump-24-And-Reach-Over-190-Billion-This-Year/
[17] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Yh9OWbHMi68fG@NF903HaQAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[18] https://whitepapers.theregister.com/
Italy makes quite a bit of sense for a semiconductor fab
Italy, meanwhile, to some may not be a natural choice to establish a semiconductor fab, yet Intel is in the midst of a $5.4bn acquisition of Tower Semiconductor, which has factories in Italy, America, and Japan.
I wouldn’t say Italy is such a strange location for a semiconductor production facility. Italy is a global top-ten manufacturing and exporting powerhouse with its biggest export category (around 18% of total export value) being ‘computers and machines’ (and no, those are not just Arduinos). That is three times as much as the export of their entire car industry.
Germany and Italy are probably the biggest suppliers of machinery to China’s manufacturing sector (it’s no surprise that some of the first cases of coronavirus were in northern Italy as there is high volume constant travel between China and Italy for this particular reason). My mother in law owns a factory in West Africa and whenever she’s in Europe to visit us in London she also tags on a trip to Germany and Italy to visit suppliers of machinery.
Then there is the huge car manufacturing business, being home to the world's second largest helicopter manufacturer, not insignificant train manufacturing and a sizeable defense industry.
Italy is quite a big player in large/supercomputing too. As of last year Bologna is the home of [1]the supercomputer of the European Centre for Medium-Range Weather Forecasts (ECMWF) when that facility had to leave Reading in the UK. Stock market operator [2]EuroNext is moving their huge datacentre operations from Basildon near London to Bergamo near Milan . Italy is home to a number of globally competitive supercomputers, most notably the [3]Marconi-100 and the [4]Leonardo and hosts a bunch of computing nodes for CERN's Worldwide LHC Computing Grid.
And, last but not least, Italy has a big aerospace sector, the fourth biggest in Europe and seventh biggest in the world. Europe’s second biggest rocket (after the Ariane by ArianeSpace) is the Vega (Vettore Europeo di Generazione Avanzata) made by [5]Avio .
That means that if you’re producing chips for customers that want to keep their supply lines literally short then Northern Italy is definitely one of the top locations in Europe.
[1] https://www.ecmwf.int/sites/default/files/medialibrary/2021-09/ecmwf-bologna-press-kit-14-sept-2021.pdf
[2] https://www.reuters.com/world/europe/basildon-bergamo-euronext-data-move-seen-headache-traders-2021-04-29/
[3] https://www.hpc.cineca.it/hardware/marconi100
[4] https://www.cineca.it/en/hot-topics/Leonardo
[5] https://en.wikipedia.org/wiki/Avio