Intel will most likely build a new factory in Germany

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Due to the large chip shortage, many chip manufacturers are expanding. The most significant expansions are taking place in Taiwan, South Korea and the United States. It is still unclear how many companies will build a chip factory in Europe. So far, Intel is the only one that has promised to build a European factory, and it will most likely be in Germany.

More factories are needed to solve the global chip shortage. The three most important players, Intel, Samsung and TSMC, have all started building new and expanding existing factories. In addition, they are still investigating which locations are ideal for building more factories.

Intel is so far the only manufacturer that has agreed to build an additional factory in Europe. Intel already has a factory in Ireland but will add a second major factory. The United Kingdom is reportedly out of the race because of Brexit. In a recent interview, Techzine had with Intel, it became clear that the company has received 70 proposals from local governments for new factory locations. Most of those proposals origin from Germany. Of those 70 proposals, there are currently ten left, and from those, Intel will make a choice. Percentage-wise, Germany has the best chance.

Read the full interview with Intel: Intel’s strategy has failed, won’t recover until 2025?

It is unclear what other countries are still in the race. The Netherlands could be attractive because of the presence of ASML. However, that is only a slight advantage compared to the available subsidies. There is a large sum of European support available of tens of billions of euros anyway. Still, on top of that, Germany would like to subsidise even a couple of billion euros more. The Dutch government reportedly has 300 million euros available for additional subsidies. Any conditions associated with such a subsidy will also be important for a manufacturer, but more money is always better.

Intel has indicated that it wants to build another mega factory in Europe. These often consist of eight smaller factories. Over ten years, this will involve an investment by Intel of around 80 billion euros. Getting such a large factory in a region does bring economic benefits.

Samsung has not yet released any information about the possible opening of factories in Europe. They are currently focusing on South Korea and the United States. However, the EU is in discussion with Samsung. TSMC is reportedly considering building a factory in Europe, with Germany also being a favourite. However, this is far from being definitive.