Intel goes slow, casts doubt on Italian chiplet fab

Business news | January 23, 2023

By Peter Clarke

Intel’s CEO Pat Gelsinger has cast doubt on Italy as the location for a US$5 billion chiplet assembly plant, saying other locations are possible. Intel is also apparently slowing down the process saying a decision will only be made sometime this year.

Intel had already said it was in discussions with the Italian government and considering a couple of locations with Vigasio in the Italian region Veneto, roughly 70 miles west of Venice, as the favorite (see Intel picks site for Italian chiplet factory).

Now Gelsinger has told Italian newspaper Il Corriere della Sera: “Originally we announced a packaging plant in the European Union, and this project remains. Now we have to see where to land this project, in which country.”

It may be that a change of government in Italy has introduced uncertainty. During negotiations with the previous government under Prime Minister Mario Draghi, it seemed that Italy was ready to provide the 40 percent subsidy Intel was seeking. Italy is now led by Prime Minister Giorgia Meloni.

Gelsinger confirmed to the newspaper that he had spoken with PM Meloni during the World Economic Forum in Davos.

Still in the game

“Italy is still in the game, but so are other candidate countries. We’re trying to see where. We will decide within the year.” Poland, Ireland and France were also possible locations for the chiplet assembly factory which is expected to begin production between 2025 and 2027.

Intel has extensive plans to invest in manufacturing production in Europe but all are dependent on receiving massive subsidies.

Intel has announced a plan to build a major chip manufacturing campus in Magdeburg, Germany. But Intel is pushing back the start date for the construction, from 1H23, while asking for more government subsidies, according to regional newspaper Volkstimme.