Italian chip fabrication (maybe)

Thursday 31st March, 2022 - Bruce Sterling

The Italian government recently announced a $4.6 billion investment in domestic chip manufacturing, to be completed by 2030. This is a direct attempt to secure the country as the location of Intel’s next European fab site, and all the attending jobs and tax revenues that come along with it. Rome will use tax revenue, along with a portion of the funds made available by the EU Chips Act, to finance the effort.

Prime Minister Mario Draghi’s government approved the plan just weeks after Intel chose Magdeberg, Germany as the site of their first new European plant, a move that’s a part of Intel’s approximately $100 billion, eight-phase investment in diversifying the global semiconductor supply chain.

Rome has been wooing Intel for months in an effort to become home to an innovative new chip packaging fab that’s expected to cost $9 billion over the course of a decade. The U.S. chip titan is reportedly asking for favorable energy rates and labor assistance among other concessions.

Italy will use the money for “research and development of microprocessor technology and investments in new industrial applications of innovative technologies,” along with upgrading existing industrial sites to be fab-friendly.

Interestingly enough, and potentially to set his nation up for Intel success, Draghi invoked his government’s “Golden Power” and blocked the acquisition of Italian semiconductor equipment supplier LPE by Chinese investment group Shenzhen Invenland Holdings in spring of 2021. LPE’s machinery treats silicon with chemicals that make it ready to become chips, and is crucial to the semiconductor supply industry.

It’s no surprise, and nothing new, that governments want semiconductor fabs within their borders. Fabs mean jobs, often good ones.