Intel to invest $36 billion in new computer chip factories in Europe

The European plan includes construction of two new factories in Magdeburg, Germany, a city between Berlin and Hanover. Intel will also double its existing manufacturing facility in Leixlip, Ireland, and is in negotiations with Italian officials about a possible manufacturing site.

On the research side, Intel plans to establish a new European R&D hub near Plateau de Saclay, France, on the southwestern outskirts of Paris. And it will create a joint lab with the Barcelona Supercomputing Center in Spain and expand its existing research facility in Gdansk, Poland, the company said.

“We are committed to playing an essential role in shaping Europe’s digital future for decades to come,” Intel chief executive Pat Gelsinger said in a statement.

Rising tensions between the United States and China are also motivating the investment efforts, as Western governments worry about the security of computer chip supplies from Asia.

About 75 percent of chip production takes place in East Asia, and more than 90 percent of the most advanced chips are manufactured in Taiwan, an island China has regularly threatened to take by force if Taiwan’s democratically elected government declares legal independence.

In a statement, Intel said its European investments will address “the need for a more balanced and resilient supply chain.”

Taiwan, South Korea and China have become major manufacturers of chips in part by heavily subsidizing the expensive and complex manufacturing. It can take $10 billion or more of investment and years of construction to establish the high-tech facilities.

Both the United States and European Union are aiming to provide billions of dollars in new subsidies for chip manufacturers, though the U.S. subsidies have gotten delayed in Congress.

The Senate and the House have both passed bills that would allocate $52 billion to subsidize construction of U.S. chip factories, but the bills still must be merged through the conference process. In the Senate, Majority Leader Charles E. Schumer (D-N.Y.) and his Republican counterpart, Minority Leader Mitch McConnell (Ky.), hope to begin that process before the April recess, according to a Senate aide who spoke on the condition of anonymity to discuss internal matters.

Intel currently employs about 10,000 people in Europe. The new investments will create 3,000 high-tech jobs in Germany, 1,000 in France and 1,500 in Italy, plus thousands more at construction companies and suppliers, Intel said.

“Germany welcomes Intel and the significant investment the company plans to make,” German Chancellor Olaf Scholz said in a statement Tuesday. “The first of its kind fab site in the E.U. would help rebalance global silicon capacity and create a more resilient supply chain.”

Intel’s new investments in Europe and Ohio won’t help alleviate the computer chip shortage immediately, because the factories will take several years to build. Construction of the German site is expected to begin in the first half of 2023, with production planned to begin in 2027, Intel said.

The company said its initial investment plans in Europe will total 33 billion euros ($36 billion) but could rise to 80 billion euros over the next decade if the company opts to continue expanding.

Marianna Sotomayor contributed to this report.