Intel announces the creation of Silicon Junction, a €17 billion manufacturing unit in Germany.

In the context: Intel has been operating in the European Union for 30 years and employs about 10,000 people in 27 member countries. Now, the silicon giant’s newly formed Foundry Services division is aiming to capture a larger share of the semiconductor market, and its latest move is a European manufacturing division that will manufacture everything from microcontrollers to the most advanced chips for phones, computers, servers. and network infrastructure.

Last year, Intel unveiled an ambitious plan to create a new chip manufacturing division in Europe as part of its IDM 2.0 strategy. At the time, the company said it would invest up to 80 billion euros ($87.5 billion) over the next few years to build at least two factories in the region, but their exact location remained a mystery.

Today the company announced Silicon Junction is the first phase of an aggressive multi-year plan to expand and diversify its manufacturing capabilities. The plan starts with a new cutting-edge manufacturing mega-site in Magdeburg, Germany, which is another way of saying that Intel will build a campus the size of a small town. The project will require at least 17 billion euros ($18.6 billion) in investment funds and is in many ways similar to another Intel facility to be built in Columbus, Ohio.

The German hub will host about 3,000 permanent employees and 7,000 temporary workers for construction work. But more importantly, it will play an important role in the European Union’s plan to reduce its dependence on chip imports. The EU has set an ambitious goal of achieving a 20 percent market share in semiconductor output by 2030, and to that end, companies like Intel will be able to access a massive €145 billion ($158.7 billion) subsidy pool. from the Recovery and Restoration Unit. Sustainability Fund.

Intel expects to start operations at the Magdeburg site sometime in the first half of 2023, with mass production scheduled to begin in 2027. Interestingly, the company wants to equip its two factories in Magdeburg with advanced manufacturing tools capable of producing chips in sub-3nm process technology. process node such as Intel 20A and Intel 18A. These advanced chips will be the first chips to integrate Intel’s RibbonFET technology, a new generation of transistors designed for Angstrom-era products.

The ambitions of Team Blue in Europe do not end there. Intel will spend an additional €12 billion ($13.1 billion) to expand its Leixlip, Ireland campus with additional manufacturing capacity, bringing the total investment in the region to €31 billion ($33.9 billion) and the number 6500 permanent employees.

In addition to expanding site capacity, Intel plans to equip a new chip manufacturing facility at Intel Technology Node 4, which will be a boon to the EU’s dream of “strategic autonomy.” There are several major projects in the EU related to RISC-V processors and hyperscale cloud systems that could greatly benefit from a well-developed local supply chain for advanced semiconductors.

Italy will also receive a €4.5 billion ($4.9 billion) investment from Intel in a manufacturing facility that could be operational as early as 2025 and create around 1,500 permanent jobs.

After acquiring Israeli custom-chip maker Tower Semiconductor for $5.4 billion, Intel wants to leverage the latter’s partnership with local STMicroelectronics to ramp up manufacturing capacity for mature technology nodes. This will have positive implications for automakers and industries dependent on less advanced chips.

In addition, Intel plans to spend billions over the next few years to expand its R&D centers in France, Poland, and Spain, which focus on foundry technology, high-performance computing, neural networks, graphics, audio technology, and more. These efforts will create over 1,000 additional jobs in these countries.

Intel CEO Pat Gelsinger believes these investments will go a long way towards building a more resilient semiconductor supply chain. This is not intended to address the current chip shortage, but with additional investment from companies such as TSMS, Samsungas well as smaller chipmakers, the semiconductor industry as a whole will be better protected from trade wars, plant closures and demand surges.

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