Italy is about to clinch a deal worth $5 billion (roughly Rs. 39,600 crore) with Intel in order to build an advanced semiconductor packaging and assembly plant within the country. Intel's investment in Italy is an element of a wider plan which was announced by the US chipmaker earlier this year in order to invest $88 billion (roughly Rs. 6,97,500 crore) in building capability across Europe, that is trying to chop its reliance on Asian chip imports and ease a supply crunch that had curbed output within the region's strategic car sector.

HIGHLIGHTS
Intel has been in contact with Italy in order to build a factory in the country
Europe has been trying to chop its reliance on Asian chip imports
Total size of Intel’s investment and plans to fund its share has not been clear yet

According to the sources, the government of outgoing Prime Minister Mario Draghi was operating to have an agreement in place by the end of August, ahead of a snap national election which was scheduled on September 25.

Rome has been prepared to fund around 40 percent of Intel's total investment in Italy, that is expected to get rise from the initial $5 (roughly Rs. 39,600 crore) billion.

The total size of Intel's investment and the way Italy would plan to fund its share of it has not been clear yet.

Under the so-called CHIPS Act which had been aimed towards funding innovative semiconductor facilities, earlier this year the European Commission has mentioned that it had 15 billion euros available in further public and private investment by 2030. This has been on the top of 30 billion euros of public investments which were already planned from NextGenerationEU, Horizon Europe and national budgets.

Rome has set aside EUR 4.15 billion (roughly Rs. 33,539 crore) till 2030 to draw the attention of the chipmakers and would invest in new industrial applications of innovative technologies.

The government has been in conversation with the French-Italian STMicroelectronics, Taiwan chipmakers MEMC Electronic Materials and TSMC, and Israeli Tower Semiconductor that Intel had bought earlier this year.

STMicroelectronics last month had signed a pact with GlobalFoundries in order to build a $5.7 billion (roughly Rs. 45,200 crore) chip factory in France.

Also Read: Intel Initiates in Making Chips for Car Companies in Next Few Months!