Foundry Intel Launches 'Pasantgongse' Offensive... Investing 110 Trillion Won in Europe Over 10 Years

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] American semiconductor company Intel will invest 80 billion euros (approximately 110 trillion KRW) in Europe over the next 10 years. It plans to build a semiconductor factory in Germany, a research and development center in France, and make additional investments in Ireland, Italy, and other countries. Intel's move is understood to be aimed at dominating the European market following the U.S. and reshaping the Asia-centered semiconductor market.

On the 15th (local time), Pat Gelsinger, Intel's CEO, held a press conference and announced detailed plans for semiconductor investments in Europe. This is a large-scale investment plan announced just two months after revealing a $20 billion (approximately 24.9 trillion KRW) investment to build a semiconductor factory in Ohio, USA. CEO Gelsinger said, "Intel's investments will span the entire European Union (EU), from Spain to Poland," adding, "because a more balanced and resilient global supply chain is necessary."

The core of the plan is to invest 17 billion euros to build a semiconductor manufacturing plant in Magdeburg, Germany. Construction is scheduled to begin in the first half of 2023, with production starting in 2027, and it is expected to house foundry (semiconductor contract manufacturing) facilities. Given the many automobile manufacturers in Europe, there is a high possibility of producing automotive semiconductors using advanced 5-nanometer (nm; 1 nanometer = one billionth of a meter) process technology. Intel declared its entry into the automotive semiconductor foundry business last month.

Intel also plans to establish a research and development center near Paris, France, to conduct research on enhancing high-performance computing (HPC) and artificial intelligence (AI) design capabilities. Additionally, it will expand its existing semiconductor production facilities in Ireland with an investment of 12 billion euros, build post-processing facilities worth 4.5 billion euros in Italy, and increase experimental facilities in Poland by 50%.

Intel's aggressive investment is putting pressure on the foundry market. Currently, the foundry market is dominated by Taiwan's TSMC and Samsung Electronics. According to market research firm TrendForce, TSMC held a 52.1% market share in the fourth quarter of last year, followed by Samsung Electronics with 18.3%. UMC, GlobalFoundries, and SMIC are chasing, but only TSMC and Samsung Electronics have the capability for advanced processes below 5 nanometers worldwide. Intel is continuing its investments to elevate its technology to this level. The industry notes that although it is not easy for Intel, which announced the resumption of its foundry business last year, to reach advanced process stages in a short time, it is showing rapid growth based on its capital strength and support from the U.S. and European governments, and the situation is being closely monitored.

Intel's decision coincides with the EU's active efforts to attract semiconductor manufacturing facilities. The EU, prompted by the semiconductor supply shortage that began with COVID-19, has set a goal to achieve 20% of global semiconductor production within Europe by 2030 and is making large-scale investments. Currently, the semiconductor production share of EU member countries is only 9%. Although the EU has not disclosed how much subsidy it is providing for Intel's investment, foreign media report that Intel has received support not only from the EU but also from individual countries as it establishes semiconductor-related facilities in multiple nations. Thierry Breton, EU Commissioner, stated that discussions on investments by other semiconductor manufacturers are underway and expressed hope for announcements within a few months.

This content was produced with the assistance of AI translation services.