Italy and Intel nearing a 5-billion-dollar microchip plant deal

The country is keen on doing its part to ensure technological independency for the EU

The outgoing Italian government and the US tech giant Intel are getting close to concluding a deal that would see the construction of a semiconductor plant in the European country. According to Reuters, citing unnamed sources, the total deal package would be valued at around 5 billion US dollars, of which the Italian government is ready to contribute 40%.

The talk of such a deal is important news since it underlines the strategic ambition of both the corporate and government sectors to grow the semiconductor industry. For the American company, it would represent a pillar in their overall growth plan for the European market, which itself means investments of up to 88 billion dollars, with several countries being beneficiaries.

The European Union is in the throes of economic emancipation on several fronts following the successive crises caused by the Covid pandemic, inflation and the war in Ukraine, which served to disrupt global supply chains and expose the vulnerability of having to rely on distant producers for commodities.

The exact location of the future plant is still a matter of speculation

The government of outgoing Prime Minister Mario Draghi is pushing to seal the deal by the end of August ahead of snap elections scheduled for September 25, the sources said. Rome is willing to finance up to 40% of Intel's total investment in Italy, which is expected to exceed the initial $5 billion over time.

Italian authorities and the US company have not officially commented on the matter. The regions of Piedmont and Veneto are indicated as preferred locations for the construction of the facility, although Lombardy, Puglia and Sicily were also among the initial options.

Earlier this year, the European Commission announced that it had secured 15 billion euros of public and private funding under the Chips Act. This will be added to the 30 billion euros already planned under other programs aimed at boosting investment in innovative semiconductor equipment.