Intel wants more factories and its hounding nations for subsidies

Published: 19th June 2021 | Source: Reuters | Author: Mark Campbell

Germany's Economic Minister Hubert Aiwanger has confirmed (via Reuters ) that Intel is in talks with the German government to create a European chipmaking fab in Bavaria, hoping to counter the world's chip shortage with additional manufacturing capacity in the EU and US.

With Germany being a manufacturing hub for many automakers, the nation is keen to increase the semiconductor manufacturing capacity within their borders, as the automotive industry has been hit hard by today's chip shortages. As such, Germany may be interested in giving Intel state aid to create a new semiconductor fab on their soil.

Intel wants to become one of the world's major chipmakers, opening up their foundries to use by external companies, allowing them to compete with TSMC and Samsung in the high-end silicon fabrication market. This is Intel's IDM 2.0 strategy, and this strategy will force Intel to build additional fabs to meet both internal and external demand.

Intel needs enough manufacturing capacity to meet its own needs and the needs of its foundry partners, and to achieve this, Intel is seeking billions in public subsidies. The EU and US want to increase their market share within the high-end semiconductor market, a vital industry currently concentrated in East Asia.

The US and EU want more manufacturing capacity within their borders, and Intel wants to be the primary beneficiary of any public investments made in the US/EA semiconductor market. Intel gets to grow their business, increase its TAM (Total Addressable Market), and meet the west's needs for semiconductor growth. To achieve these business goals, Intel want's your government's money.

Intel's Bavarian fab has several obvious customers within the automotive market, making the location ideal for Intel. For Intel's IDM 2.0 strategy to succeed, they need customers, and building a fab close to the home of automakers like BMW is an easy way for them to garner the interests of automotive giants.

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