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Intel seeks $10 bln in subsidies for European chip plant

Intel (INTC.O) wants 8 billion euros ($ 9.7 billion) in public subsidies to build a semiconductor factory in Europe, the CEO said Friday as the region tries to reduce its dependence on imports amid shortages of supplies.

The pitch marks the first time Pat Gelsinger has publicly announced how much state aid he would like as Intel pursues a multi-billion dollar drive to compete with Asian competitors in contract manufacturing.

“We demand from both the US and the European governments that we make it competitive here compared to Asia,” said Gelsinger in an interview with Politico Europe.

Politico quoted Gelsinger and said he was looking for subsidies of around 8 billion euros. The company later distanced itself from the report, saying it did not provide a specific number, although it made it clear that EU leaders would need to invest to ensure a vibrant semiconductor industry.

Gelsinger met EU Commissioner Thierry Breton on his first European tour since taking office on Friday in Brussels. The visit followed the launch of a plan for Intel to invest $ 20 billion in chip manufacturing in the United States. Continue reading

In addition, Gelsinger is looking for a location for a plant in Europe that will support Breton’s goal of doubling the region’s share of global chip production to 20% over the next ten years.

Breton held talks with Taiwan Semiconductor Manufacturing Co Ltd (TSMC) earlier on Friday. (2330.TW), the world’s leading chip maker ahead of the Korean Samsung (005930.KS) and Intel.

In separate tweets, Breton described his meeting with Intel’s Gelsinger as an “in-depth discussion”, while a video call with Maria Marced, President of TSMC Europe, had been a “good exchange”.

“In order to meet the current and future demand of the semiconductor industry, Europe will drastically increase production capacity – both alone and through selected partnerships to ensure security of supply,” said Breton.

TSMC said the talks with Breton showed its commitment to the region. “Our desire to serve our customers as fully as possible means that we are always ready to establish open communication with governments and regulators wherever they and we are based,” the company said.

The commission said Breton would have further discussions on May 4th with the CEOs of two Dutch semiconductor manufacturers: ASML (ASML.AS), the leading manufacturer of semiconductor lithography tools, and with chip maker NXP (NXPI.O).

The recent disruption in semiconductor supply chains has made efforts to reduce import dependency even more urgent. Analysts warn, however, that Europe’s shrinking technology base does not offer a viable market for a state-of-the-art facility or “factory”. Continue reading

Industry and diplomatic sources say that among the three major chipmakers, Intel is the only one that has so far shown any specific interest in Breton’s goal of making the most advanced chips in Europe.

Breton’s drive to attract a large foreign chip maker has unsettled local gamblers, and he is also discussing the creation of a European semiconductor alliance that would pool their interests. Continue reading

Germany’s Infineon (IFXGn.DE) said Friday it welcomed Breton’s initiative to strengthen chip manufacturing in Europe.

“Since financial resources are of course limited, it is important to discuss the most pressing needs and the most sensible investment opportunities,” said Infineon.

GERMAN VISIT

Gelsinger, who met Economics Minister Peter Altmaier and Bavarian Governor Markus Soeder on his trip to Germany, was quoted as saying that Germany was a suitable location for a potential European foundry.

“When you are in Europe, you want to be geopolitical in continental Europe,” he told Politico in a remark that was repeated in a second interview with the German business newspaper Handelsblatt.

“We see Germany as a good candidate – not the only one, but a good candidate – for building up our manufacturing capacities,” he said and also showed interest in the Benelux countries.

In Germany, Gelsinger also met executives from the automaker BMW (BMWG.DE) and telecommunications operator Deutsche Telekom (DTEGn.DE)Said Intel. According to sources, he also visited Volkswagen headquarters (VOWG_p.DE)although neither side confirmed this.

Gelsinger travels to Israel next week, where Intel will announce a $ 200 million investment in a new campus for chip development and hiring 1,000 people. Continue reading

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