Intel May Spend Up To €80bn On Chip Plants In Europe Over Next Ten Years

Intel’s CEO Pat Gelsinger on Tuesday said he would be willing to pour up to €80bn (£68.8bn, $94.7bn) into its semiconductor fabs in Europe to increase capacity over the next decade.

He added that the chip behemoth's Ireland factory would start making semiconductor components for carmakers.

Chipzilla is hoping to expand its chip manufacturing operations in Europe amid the global semiconductor shortage. Intel is looking to build fabrication facilities in France, Germany, Belgium, Poland, or the Netherlands, and is expected to announce by the end of the year where it hopes to put two plants on the continent.

“A total project of €80bn euros over the next decade would be a catalyst for the semiconductor industry,” Gelsinger said at this year’s Munich Auto Show.

Chip manufacturers are swamped with a backlog of orders that have built up over the COVID-19 pandemic. A surge of demand for electronics for data centers, computers, and tablets for people working and learning from home, among other effects on the market, has led to a crunch in parts and materials.

The auto industry has been hit particularly hard. Ford and General Motors temporarily closed down its factories, and production lines were paused from a lack of components needed for braking to infotainment systems. Nissan, Toyota, and Volkswagen also announced they would have to slash production rates by as much as 40 per cent and make fewer cars, too.

• China's biggest chipmaker to build colossal chip factory
• TSMC to hike some chip prices 'by as much as 20%'
• Taiwan and Arizona economic groups agree to bring more chip industry to desert state
• Baidu unveils AI chip to go in its fancy-pants robocar – and anywhere else someone may want to use it

Gelsinger said earlier this year he wants his biz to make chips for automakers within the next six to nine months. Those components are expected to be fabbed at Intel’s Leixlip campus in County Kildare, Ireland, though it’s not clear when that process will start, however.

"Cars are becoming computers with tires. You need us and we need you ... The aim is to create a center of innovation in Europe, for Europe," Gelsinger added.

Chips in vehicles are expected to become more advanced and expensive. Intel expects 20 per cent of the cost of new cars will be down to semiconductors by 2030, a five-fold increase from 2019. ®