Italy woos Intel with billions of euros, favorable terms, for domestic chip plant

As per a draft decree, Italy plans on allocating $4.6 billion (4 billion euros) until 2030 towards domestic production of chips as it attempts to attract more investment from tech companies including Intel to invest in its economy.

The Italian government is trying to persuade Intel to sink in billions of euros on an advanced chipmaking plant in the country.

To this end it is ready to offer Intel public money and other favourable terms to fund part of the overall investment, which is expected to be worth around $9 billion (8 billion euros) over a period of 10 years.

In a bid to boost domestic chipmaking, Italy also plans on talking with French-Italian chipmaker STMicroelectronics, Taiwanese-controlled MEMC Electronic Materials Inc and Israeli Tower Semiconductor, which is set to be acquired by Intel.

Negotiations with Intel are complex since Intel has tabled very tough demands, said a government source involved in the talks.

To clinch a deal with Intel, Rome is also relying on new funding rules for innovative semiconductor facilities announced last month by the European Commission under so-called Chips Act.

Brussels has made available 15 billion euros in additional public and private investment by 2030, on top of 30 billion euros of public investments already planned from NextGenerationEU, Horizon Europe and national budgets.

In September 2021, Intel had said it could invest as much as $95 billion in Europe over the next decade.

Under the plan, Intel has chosen Magdeburg as the site for a new multibillion-euro European chip factory, said a source .

As part of an 8 billion euro package to support the economy and curb surging energy bills, Italy plans to allocate 150 million euros in 2022 and 500 million euros per year from 2023 until 2030, states the decree.

Rome aims to use the funding to convert existing industrial sites and favour the construction of new plants in Italy.

EU countries are eager to reduce their dependence on chip supplies from China and the United States following recent supply chain issues.

($1 = 0.8949 euros)

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

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