Report: Germany woos Intel to build new chip fab

23 June 2021

The European Union (EU) has lofty goals for the future of semiconductor manufacturing. By 2030, the EU wants to produce 20% of the world’s global chips.

To reach this goal, more semiconductor fabrication plants, or fabs, will need to be constructed with companies on board to float the bill.

According to a report from Reuters, Germany is in talks with Intel Corp. to build a new European fab in the state of Bavaria to help cure the bottlenecks of chip production that are plaguing the supply chain.

The ongoing chip shortage has impacted the supply chain since the beginning of the year, hitting the automotive sector particularly hard. Automakers have since revised profitability levels for 2021 as they have been forced to cut production on some vehicles.

According to the report, Intel has been looking to receive about $9.5 billion in public subsidies to build a chip fab in Europe. The government of Bavaria has suggested an unused airbase in Penzing-Landsberg, west of Munich as a potential location for the factory.

The move to build a factory in Bavaria has already garnered support from BMW, calling it an outstanding opportunity for automotive chip makers as well as the overall supply chain.

The EU is also looking to create a semiconductor alliance with European chipmakers STMicroelectronics, NXP Semiconductors, Infineon and ASML to cut dependence on foreign semiconductor vendors during the global supply chain shortage.

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