Intel (NASDAQ: INTC) has announced the first phase of its plans to begin investing heavily in its European operations. The Santa Clara-based chipmaker revealed plans to pour over €33 billion into generating more self-reliance in Europe when it comes to semiconductors.
Let’s take a look at exactly where that money’s going to be spent.
What is Intel investing in?
Two semiconductor fabrication sites are set to be built in Germany at a cost of €17 billion. Construction is slated to begin in early 2023 with the sites operational and actively producing chips by 2027. Intel lauded the location for its “top talent, superb infrastructure, and an existing ecosystem of suppliers and customers,” labeling Germany an “ideal place” to establish a new center for chipmaking excellence.
Intel is also planning to create a new research, development, and design center in France, while also furthering its investment at sites in Ireland, Poland, Spain, and Italy. Of particular note — especially to an Irish company like MyWallSt — is the €12 billion planned to spend on doubling the firm’s manufacturing space in Ireland. This will bring Intel’s total investment in Ireland to over €30 billion.
All of this comes as part of a plan to invest over €80 billion in the European Union over the next 10 years, with the hopes that Intel can offset future supply chain issues in the region by reducing overreliance on chip imports.
So, what does this mean for Intel investors?
Semiconductors and supply chain issues have been two inextricably linked terms for the past year that I’m sure we’ve all heard more than enough of. Chipmakers have never been more in demand, as they simply can’t make their wares fast enough to meet global appetites.
Decentralizing from Asian and American production lines will only serve Europe — and the semiconductor companies who operate there — well in its bid to protect itself from the uncertainties of supply chain disruption and geopolitical strife.
Europe currently has aspirations to double its share of the global semiconductor market by 2030. Intel is now pivotal in this politically backed push. Success here could wrest back some control from Samsung in South Korea and TSMC in Taiwan. If Intel’s investment pays off, it’s positioning itself as the leading chip provider to one of the world’s most lucrative markets.
Financial Writer at MyWallSt
Pádraig’s favorite stock is Nike. Growing up as a sports fanatic, seeing Nike collaborate with athletes like Jordan, Lebron, and Ronaldo inspired him and cemented the brand in his mind. Now, despite having failed miserably in his attempts to earn a fabled Nike sponsorship, he still believes in the innovation and creativity behind Nike and is convinced they will only grow stronger as the world's leading sports brand.