European nations battle to bag some of Intel's billions Intel's doing a European version of Amazon HQ2: enticing governments to pledge more and more funds to subsidize the construction of chip mega-plants along with ever-growing packages of benefits. Recent reports have named Germany, Italy, and France as potential spots for new Intel super-fabs, factories, and offices. Italy just …
Italy, meanwhile, to some may not be a natural choice to establish a semiconductor fab, yet Intel is in the midst of a $5.4bn acquisition of Tower Semiconductor, which has factories in Italy, America, and Japan.
I wouldn’t say Italy is such a strange location for a semiconductor production facility. Italy is a global top-ten manufacturing and exporting powerhouse with its biggest export category (around 18% of total export value) being ‘computers and machines’ (and no, those are not just Arduinos). That is three times as much as the export of their entire car industry.
Germany and Italy are probably the biggest suppliers of machinery to China’s manufacturing sector (it’s no surprise that some of the first cases of coronavirus were in northern Italy as there is high volume constant travel between China and Italy for this particular reason). My mother in law owns a factory in West Africa and whenever she’s in Europe to visit us in London she also tags on a trip to Germany and Italy to visit suppliers of machinery.
Then there is the huge car manufacturing business, being home to the world's second largest helicopter manufacturer, not insignificant train manufacturing and a sizeable defense industry.
Italy is quite a big player in large/supercomputing too. As of last year Bologna is the home of the supercomputer of the European Centre for Medium-Range Weather Forecasts (ECMWF) when that facility had to leave Reading in the UK. Stock market operator EuroNext is moving their huge datacentre operations from Basildon near London to Bergamo near Milan. Italy is home to a number of globally competitive supercomputers, most notably the Marconi-100 and the Leonardo and hosts a bunch of computing nodes for CERN's Worldwide LHC Computing Grid.
And, last but not least, Italy has a big aerospace sector, the fourth biggest in Europe and seventh biggest in the world. Europe’s second biggest rocket (after the Ariane by ArianeSpace) is the Vega (Vettore Europeo di Generazione Avanzata) made by Avio.
That means that if you’re producing chips for customers that want to keep their supply lines literally short then Northern Italy is definitely one of the top locations in Europe.
Ah, how can I compete with so persuasive a case for Italy.
I am however disappointed that the UK isn't being considered. Greater opportunities for state aid, established prowess in chip design (ARM and the Raspberry Pi, even if you ignore older designs), the advantages of Free Ports coming soon and access to markets the EU haven't yet penetrated.
Plus frankly the UK needs better self-sufficiency in semiconductors. Italy is welcome to buy them from us too - or we'll swap them for Maserati cars.
I don’t think Intel's fab location strategy is about semiconductor knowledge or prowess.
Intel CEO Pat Gelsinger has said “Europe has two jewels. One is ASML, the most advanced lithography, and the other is IMEC, the most advanced semiconductor research in the world.” I would, however, be surprised if Intel were to choose the Netherlands (AMSL) or Belgium (IMEC) for a plant. I get the impression Intel is not looking for fabs near suppliers (be that material or knowledge) but near customers.
Hence Intel hasn’t chosen Germany’s semiconductor knowledge cluster dubbed “Silicon Saxony” near Dresden but opted for building a fab in Magdeburg. Magdeburg is roughly equidistant between Volkswagen’s biggest factory and Tesla’s new factory. That may or may not be a coincidence but it does give me the impression that it’s not knowledge clusters they’re looking for.
If Intel were to come to the UK, and I believe they ruled that out years ago, I suspect it wouldn’t be around knowledge cluster Cambridge (ARM, Raspberry PI) but rather around a manufacturing cluster (West Midlands?).
Magdeburg, of course, has a long history with vacuum technology, but I suspect the real factor is that it is well in the former East Germany and doubtless eligible for some sort of tax incentive or "levelling up" scheme. Germany and Italy are keen to attract that kind of high value work especially to disadvantaged areas.
As for Intel coming the the UK, I don't imagine our Department of Business knows the difference between a silicon chip and an oven chip.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
