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Deal close for $5bn Intel Italy chip plant

The Intel Italy plant may be built in Piedmont.

Piedmont, one of the potential homes for the Intel Italy plant. Image by Cristian Giordano, via Unsplash.

Intel and Italy are close to agreeing a deal to build a $5 billion chip packaging and assembly plant in the country, with the Italian government funding up to 40% of the costs, according to Reuters.

Rather than a semiconductor fabrication plant, the new Intel Italy facility would work on packaging up chips for use, in the words of Reuters’ report using “new technologies to weave together full chips out of tiles”. Two potential sites, in Piedmont and Veneto, have been shortlisted.

The Intel Italy deal would see the country join Germany, Ireland and France as a site for new Intel facilities in Europe, in the wake of the EU’s Chips Act, agreed in February. While industry reaction to the act was muted, Intel was one of the most enthusiastic voices – and had clearly been hard at work with governments across the continent for some time, given the flurry of deals announced in recent months.

The current chances of Intel investing substantially in the UK are… minimal.

See also: Defence, industry, academics maul HMG over chip sector failings

Reuters based its Intel Italy reporting on two sources who had been briefed on the discussions, which the government of outgoing prime minister Mario Draghi is aiming to complete by the end of August. The news agency had earlier reported the Italian government was willing to spend up to €4 billion to woo Intel’s investment.

Intel’s Italy move comes weeks after STMicroelectronics and GlobalFoundries agreed to build a French facility capable of producing chips down to 18nm, and planned to reach full capacity of producing 620,000 300mm wafers a year by 2026. The new plant will be built next to ST’s current facility in Crolles, south-east of Lyon – with help from the French government.

“The partnership investment with the French government, along with our long-term customer agreements, creates the right economic model for GF’s investment,” said GlobalFoundries CEO Thomas Caulfield, in a press release.

While the UK doesn’t look set to see any major semiconductor investments, last month the National Epitaxy Facility at the University of Sheffield did win a £12 million grant from UK Research and Innovation, to continue the 40 years of semiconductor research at the university for at least another five years.

Epitaxy is the process of growing monocrystalline films for use as semiconductors; the process can allow crystals with specific electrical or mechanical properties to be formed. According to the University of Sheffield, the National Epitaxy Facility has supported £122 million in research across 25 universities since 2017.

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