Intel Wants 8 Billion Euros in Subsidies for European Chip Plant

Intel Wants 8 Billion Euros in Subsidies for European Chip Plant.

Intel wants 8 billion euros (9.7 billion dollars or about 71,249 million rupees) in public subsidies for the construction of a semiconductor factory in Europe, its chief executive said on Friday, as the region seeks to reduce its dependence on imports amid a supply shortage.

The launch marks the first time that Pat Gelsinger has publicly calculated how much state aid he would want, as Intel chases a multi-million dollar push to take on Asian rivals in contract manufacturing.

“What we are asking the governments of the United States and Europe is to make it competitive for us to do it here compared to Asia,” Gelsinger told Politico Europe in an interview.

Politico quoted Gelsinger as saying he was seeking approximately € 8 billion in subsidies. The company later distanced itself from the report, saying it had not given a specific figure, although it had made clear that EU leaders needed to invest to ensure a vibrant semiconductor industry.

Gelsinger, on his first European tour since taking office, met with European Commissioner Thierry Breton in Brussels on Friday. The visit followed the launch of a plan for Intel to invest $ 20 billion (approximately Rs. 1,48,191 crore) in chip production in the United States.

On top of that, Gelsinger is seeking a plant location in Europe that he says would support Breton’s goal of doubling the region’s share of global chip production to 20 percent over the next decade.

Breton held talks on Friday with Taiwan Semiconductor Manufacturing Company (TSMC), the world’s number one chipmaker ahead of Korea’s Samsung and Intel.

In separate tweets, Breton described his meeting with Intel’s Gelsinger as an “in-depth discussion,” while a video call with Maria Merced, president of TSMC Europe, had been a “good exchange.”

“To meet current and future demand from the semiconductor industry, Europe will dramatically increase production capacity, both on its own and through selected partnerships to ensure the security of supply,” said Breton.

TSMC said the talks with Breton demonstrated its commitment to the region. “Our desire to support our clients as fully as possible means that we are always ready to establish open communications with governments and regulators whenever they and we are,” the company said.

The Commission said Breton would hold further talks on May 4 with the CEOs of two Dutch semiconductor companies: ASML, the leading maker of semiconductor lithography tools, and chipmaker NXP.

The recent disruption of semiconductor supply chains has added urgency to efforts to reduce dependence on imports, yet analysts warn that Europe’s narrow technology base means it does not offer a viable market for a state-of-the-art plant or “fabulous”.

Industry and diplomatic sources say that of the big three chipmakers, Intel is the only one so far to have expressed concrete interest in Breton’s goal of producing Europe’s most advanced chips.

Breton’s push to attract a major foreign chipmaker has baffled local players, and he is also discussing creating a European semiconductor alliance to pool their interests.

Germany’s Infineon said on Friday that it welcomed Breton’s initiative to strengthen chip production in Europe.

“As financial resources are naturally limited, it is important to discuss the most urgent needs and the most reasonable forms of investment,” Infineon said.

German visit
Gelsinger, who met Economy Minister Peter Altmaier and Bavarian Governor Markus Soeder on the German leg of his European tour, was quoted as saying that Germany would be a suitable location for a possible European foundry.

“Geopolitically, if you are in Europe, you want to be in continental Europe,” he told Politico, in remarks that were echoed in a second interview with the German business daily Handelsblatt.

“We think of Germany as a good candidate, not the only one, but a good candidate, where we could develop our manufacturing capabilities,” he said, also indicating interest in the Benelux countries.

In Germany, Gelsinger also met with executives from automaker BMW and telecommunications operator Deutsche Telekom, Intel said. Sources said he also visited Volkswagen headquarters, although neither party confirmed this.

Gelsinger travels to Israel next week, where Intel will announce a $ 200 million investment in a new chip development campus and the hiring of 1,000 employees.