Eighty percent of the world’s chipmaking happens in Asia. Intel wants to change that, and on Tuesday it put a number on the effort: an expected $88 billion across several European countries.
The centerpiece is a second “megafab” in Magdeburg, Germany. CEO Pat Gelsinger said the first fabs there will cost about $19 billion, with construction due to start in 2023 and manufacturing in 2027. Intel expects 7,000 people to work on the build and 3,000 to hold permanent jobs once it runs.
“The world has an insatiable demand for semiconductors,” Gelsinger said in a video announcing the investments. He argued that spending in the US and Europe would give the industry a “more balanced and resilient” supply chain, less tied to Asia.
Money spread across the continent
Magdeburg is not the only stop. Intel will put $13 billion into its existing fab in Leixlip, Ireland, doubling its size so it can build chips on its new Intel 4 process. A research center in Plateau de Saclay, France, will employ 1,000 people. The company also plans to expand its research site in Gdansk, Poland, and open a supercomputing research facility in Barcelona, Spain. In Italy, it is negotiating a plan that would bring its advanced chip packaging technology there.
European Commission President Ursula von der Leyen welcomed the plan as important to Europe’s high-tech future. “Our goal is to have 20% of the world’s microchip production in Europe by 2030,” she said on the video. “That’s twice as much as today in a market that’s set to double in the next decade.”
Why the scale matters to Intel
The Europe plan sits on top of spending in the United States. In February Intel said it would build two fabs in Ohio for $20 billion, with an eventual eight fabs and $100 billion in total. A modern fab costs around $10 billion, CNET noted, mostly because of the lithography machines that etch tiny circuits onto silicon wafers. Intel has to run those plants full to pay for them. Some financial analysts have soured on its stock over the capital bill.
Demand is on its side for now. A global chip shortage still holds back everything from cars to consumer electronics. U.S. chip-subsidy legislation has not passed, but if it does, it could cut about $3 billion from the price of each $10 billion fab.
