Intel will invest up to $95 billion in European chip production from the U. S. expansion. USA

Advance Auto Parts CEO Tom Greco discusses the rise of electric cars and the effect of chip shortages on the used car industry.

Intel Corp. plans to build new chip production services in Europe worth up to $95 billion, in reaction to a cross-border race to build production capacity at a time of global chip source crisis.

Intel CEO Pat Gelsinger said Tuesday that the company plans two chip factories at a new site in Europe and could expand it further, with increases that would take total investment over a decade to the equivalent of 80 billion euros. a meteoric appeal for semiconductors such as computers, automobiles and increasingly chip-intensive devices.

INTEL CEO SAYS CHIP SHORTAGE COULD LAST UNTIL 2023

“This new era of sustained semiconductor convening demands ambitious and broad thinking,” he once said at automotive in Munich.

Rival Taiwan Semiconductor Manufacturing Co. , the world’s largest contract chipmaker, announced this year that it would spend a record $100 billion over the next 3 years to develop production capacity. accumulating investments through a third party at over $205 billion over the next 3 years, in components to continue its leadership in chip manufacturing.

Global chip shortages have hit automakers. Ford Motor Co. and General Motors Co. announced last week that they were cutting production due to chip shortages. Toyota Motor Corp. de Japan announced last month that it would cut production by 40% internationally in September. .

Intel has announced plans to allocate the production capacity of a plant in Ireland to the automotive chip sector and has created a chip design team for others to adapt the designs so they can use Intel’s production capabilities.

GET FOX’S BUSINESS ON THE GO BY CLICKING HERE

The global automotive chip market is expected to succeed at $ 115 billion over the next decade, more than double its current size, Gelsinger said.

Intel’s contract chip production business is courting consumers in Europe, adding automakers, the company said Thursday.

Daimler AG CEO Ola Källenius told the Wall Street Journal that the company is now in direct contact with chipmakers to monitor the source and that he expects shortages to remain critical until 2023.

Gelsinger predicted on Tuesday that the car flea market would more than double by the end of the decade and that semiconductors, he said, would account for more than 20% of new car hardware prices in the high-finish segment, up from 4% in 2019, as new motive force assistance capabilities. Eye-catching touchscreens and other features that require more processing force more prevalent.

U. S. -PREPARED SEMICONDUCTOR PLANT PLANS U. S. IN SCARCITY: EXCLUSIVE

Intel’s expansion of production in Europe is part of a push led by M. Gelsinger to turn Intel into a major chipmaker by contract, generating semiconductors only for its own needs, but also for corporations like cellphone giant Qualcomm Inc. and cloud provider Amazon. com Inc. introduced the effort in March by pledging to build two plants in Arizona at a cost of $20 billion and has since added a $3. 5 billion expansion effort in New Mexico.

The new European site could eventually house up to 8 production plants, Gelsinger said. Intel also plans to locate a new plant in the United States by the end of the year, he said.

Intel has sought subsidies that U. S. politicians have sought. USA And Europe is providing as they seek to protect long-term materials from factors critical to economic growth. Washington’s law gives billions of dollars in subsidies for the manufacture of local chips. EU leaders, added EU Commissioner Thierry Breton and German Economy Minister Peter Altmaier, have also pushed monetary incentives as a component of a purpose to double Europe’s share of global chip production capacity to 20% over the next decade.

Western governments have traditionally presented limited incentives to chipmakers, even as Asian countries eager to expand their domestic industries have been offering loose land, discounted utilities and tax breaks, which has led to a shift in industry to South Korea, Taiwan, China and Japan. and Singapore in recent decades. The United States was 37% old of the world’s chip production capacity in 1990, but now has 12%, according to an estimate made last year by Boston Consulting Group.

Politicians have courted Intel, TSMC, Samsung and others to set out their investment plans.

CLICK HERE TO LEARN MORE ABOUT FOX BUSINESS

Gelsinger has met with leading politicians in Brussels and EU countries in recent months to secure money for Intel’s expansion. The subsidies would make a European factory competitive with lower prices and state aid in Asia.

Gelsinger also said at one of the industry’s flagship meetings that his company is making progress in its autonomous driving efforts. Intel’s autonomous driving subsidiary Mobileye, an Israeli company acquired in 2017 for $15 billion, will launch a pilot robotaxi service assignment in Israel and Germany. Next year, the company said. The German operation, a collaboration with car rental giant Sixt SE, could be followed by ride-sharing in Germany and other European countries later this decade, the company said.

Write to Asa Fitch in asa. fitch@wsj. com and William Boston in william. boston@wsj. com

Corrections and extensions Peter Altmaier is the German Economy Minister. A previous edition of this article confused him with the German finance minister. (Corrected September 8)

Leave a Comment Cancel Reply