Intel Halts Investments in Italy and France, Focuses on Other European Expansions

Intel Cancels Fab Investment in Italy and R&D Facility in France

When Pat Gelsinger rejoined Intel in 2021 and introduced the IDM 2.0 model, he acknowledged that the company would face short-term losses but promised long-term prosperity. However, due to substantial investments in U.S. production capacity and the development of products on the latest nodes, Intel’s profit margins have become too thin. As a result, Intel is halting some of its European projects to focus on others.

Paused Projects in Europe

Intel has paused several significant investment projects in Europe due to financial losses. This policy shift affects planned projects in France and Italy, redirecting Intel’s focus to its efforts in Ireland, Germany, and Poland.

France: R&D Hub on Hold

In France, Intel had planned to establish a new research and development hub for AI and HPC near Paris. This project, which was set to open by the end of the year with 450 employees, is now on hold due to changing economic and market conditions. Despite the pause, Intel maintains that France remains a future candidate for the R&D hub.

Italy: Manufacturing Plant Shelved

Italy faces a similar situation. Intel’s proposed €4.5 billion manufacturing plant has been shelved. This facility would have created 1,500 jobs at Intel and 3,500 for suppliers. Intel’s expansion in Italy was further hampered by the collapse of its deal to acquire Tower Semiconductor, an Israeli company with connections to Italy’s STMicroelectronics. This acquisition fell through due to the lack of approval from Chinese authorities, impacting Intel’s plans to strengthen its presence in Italy.

Ongoing Projects in Germany and Poland

While some of Intel’s projects have been postponed, others in Germany and Poland are proceeding, albeit with some delays. In Germany, Intel is constructing a massive factory complex with investments for the first phase amounting to €30 billion. However, various delays have pushed the production start date to late 2028. In Poland, Intel is planning a €4.6 billion advanced chip packaging plant in Wroclaw, which will work in combination with the German facility. The German facility is set to make chiplets, while the Polish facility will package them.

Conclusion

Despite the setbacks in France and Italy, Intel remains committed to its European expansions, focusing on its projects in Ireland, Germany, and Poland. These strategic shifts highlight Intel’s adaptability in navigating economic and market challenges while continuing to invest in cutting-edge technology and infrastructure.