Intel CEO, Pat Gelsinger, says the new European chip factory will only be considered for EU member states.
He goes on to say that before Brexit, the UK would have been considered but due to the decision to leave, it is not a part of Intel’s £70 billion expansion plans.
There are currently 70 proposals across 10 different countries, and an agreement will hopefully be made by the new year on which of the EU member states wins the proposal.
Intel plans to boost its export from the US and has a 10-year plan of investing £70 billion into opening and upgrading semiconductor plants over Europe.
Intel is considering multiple factors for the proposals. The European site must be able to support up to eight fabs on 1,000 acres of land, and a decent talent pool must be accessible.
Belgium, France, Germany and the Netherlands are in the running, among others, and it’ll be announced by the new year which sites will be host to the new factories. There are plans for at least one manufacturing and one advanced packaging factory in Europe.
This follows other direct consequences of the Brexit vote, such as mass shortages of healthcare staff, care workers, and HGV drivers, and now a high-skill manufacturing investment being taken out of the running completely.
The pre-Brexit Britain was a prime location for US and Asian firms to use as an entry into the rest of Europe, and the access to international shipping ports like Tilbury, Felixstowe and Liverpool, as well as the highly technical and skilled talent pool for firms like Intel to take advantage of means the UK would have been a smart choice for a new silicone wafer plant to serve the rest of Europe.
However, supply chains need to be reliable. The Brexit vote means the UK can no longer guarantee cheap, easy and robust cross-border trade, which has led to the nation being passed over for EU member states like Ireland and Germany.
Intel’s expansion in the EU comes as a solution to the global semiconductor shortage affecting supply chains of numerous goods, from cars to computers.
September 2021 saw Toyota slash global production targets by 40%, with other manufacturers like General Motors, Nissan, Ford, Honda and Jaguar Land Rover also being forced to slow or stop production at various plants in 2021.
The chip shortage has resulted in the cost of any goods where microchips are a vital part of it, which could last until Christmas and is unlikely to stabilise until 2023.
There is some possibility that there may be a few IOUs under the Christmas trees around the world this year.
Just everything is short right now. And even as I and my peers in the industry are working like crazy to catch up, it’s going to be a while. – Pat Gelsinger, Intel CEO
As it stands currently, Taiwan and South Korea produce around 70% of the world’s supply of chips, so Intel is hoping for government subsidies in the US and Europe to address the global reliance on Asia for the supply of chips.