Italy seeks to attract Intel, others with $4.6 billion chipmaking fund

Italy intends to allocate more than 4 billion euros ($4.6 billion) until 2030 to boost domestic chip manufacturing as it seeks to attract additional investment from technology companies such as Intel, according to a draft decree.

The government is attempting to persuade the United States to invest billions in an advanced chipmaking facility in Italy, which uses innovative technologies to weave full chips.

Rome is willing to offer Intel public money and other favorable terms to support a portion of the overall investment. The sum is expected to be worth around 8 billion euros ($9 billion) in 10 years.

Italy is in discussions with STMicroelectronics, the Italian-controlled MEMC Electronic Materials Inc, and the Israeli Tower Semiconductor, which is set to be bought by Intel.

Negotiations with Intel are complex as the US group has filed very stringent demands, according to a government source involved in the discussions.

Rome is relying on fresh funding rules for innovative semiconductor facilities, as set last month by the European Commission under the so-called Chips Act.

By 2030, Brussels has made provision of 15 billion euros in additional public and private investments, on top of 30 billion euros of public investments already planned from NextGenerationEU, Horizon Europe, and national budgets.

Intel said in September that it might invest up to $95 billion in Europe over the next decade.

A person who knew the situation said on February 26 that under the scheme, the US group has chosen Magdeburg, an east German city, as the location for a new multibillion-euro European chip factory.

Italy plans to allocate 150 million euros per year from 2022 to 500 million euros per year as part of an 8 billion euro package to help the economy and reduce rising energy bills, according to the decree.

The Italian government will encourage “research and development of microprocessor technologies” as well as investment in new industrial applications of innovative technologies, according to the legislation.

Rome wants to maximize the amount of money to transform existing industrial buildings and promote the construction of new ones in Italy.

After a spike in demand for consumer electronics such as smartphones and computers, chipmakers are striving to increase productivity, owing to the COVID-19 epidemic.

After recent supply chain concerns, EU nations are attempting to reduce their dependence on semiconductor supplies from China and the United States. List23