Intel to expand chip production in Europe

Aims to establish more resilient supply chain

LONDON – U.S. chipmaker Intel unveiled plans on Tuesday to invest up to 80 billion euros ($88 billion) across Europe as part of an ambitious expansion aimed at evening out imbalances in the global semiconductor industry that have led to big chip shortages.

CEO Pat Gelsinger said Intel was investing over the next decade “along the entire semiconductor value chain.”

The company plans to spend tens of billions of dollars setting up or expanding chip production sites and establishing research and development or design centers in countries including Germany, Ireland, France and Italy.

“Why are we doing this? Because the world has an insatiable demand for semiconductors, or chips,” Gelsinger said in a webcast.

Intel said it’s bringing its most advanced technology to Europe to address the need for a “more balanced and resilient” semiconductor supply chain.

European Union leaders last month announced a $47 billion “Chips Act” to help the continent become a major semiconductor producer and curb its dependency on Asian markets for the tiny components.

Demand for chips has surged as the global economy bounced back from the COVID-19 pandemic, but supply hasn’t kept up because of bottlenecks.

European Commission President Ursula von der Leyen hailed the announcement as the first major achievement under the EU Chips Act.

“I’m sure it will pave the way for more companies to follow suit,” said von der Leyen, who wants the EU to double its share of global chip production to 20% by 2030.

The first phase of Santa Clara, California-based Intel’s investment plans include 17 billion euros to beef up its European production capacity with a leading-edge semiconductor factory “mega-site” in Magdeburg, Germany.