Intel's "six major core manufacturing bases in Europe" took shape, spending $19 billion to build a 2nm production line in Germany

Electronics enthusiast network reported (text/Wu Zipeng) On Tuesday (March 15), Eastern Time, Intel officially unveiled its European investment plan. Intel said it plans to invest more than 33 billion euros (about $36 billion) to help increase chip production capacity in Europe, including a commitment of 17 billion euros (about $18.7 billion) to build a world-class chip production base in Germany.

Intel's new plant in Germany targets below 2nm

On January 13, 2021, Intel officially announced that it has appointed Pat Gelsinger, a 40-year-old technology industry leader, as the company's new CEO. Pat Kissinger, who spent 30 years at Intel, was Intel's first Chief Technology Officer, was the architect of the 80486 processor prototype, led the development of 14 different processors, and was a key figure in the success of Intel Xeon and Core processors.

There's no doubt that Pat Kissinger is a technology stream, but his management capabilities are not to be underestimated, and before returning to Intel as CEO, he led VMware Veers to transform the company into a recognized global leader in cloud infrastructure, enterprise mobility and cybersecurity in the nearly decade, nearly tripling the company's annual revenue.

Enhancing Intel's voice in global chip manufacturing is a point that Pat Kissinger attaches great importance to after his return to Intel, intel foundry services (IFS) became one of the company's six major business lines, investing $1 billion in funds to build an innovation ecosystem for chip foundry. In February, Intel also acquired Tower semiconductor, the world's ninth-largest foundry, for $5.4 billion to speed up the company's foundry efforts.

Data source: corporate financial report, electronic enthusiast network collation

Regarding Germany's factory construction plan, Intel's ambitions are undoubtedly greater. It is reported that Intel's new plant in Germany is considered to be an important step for Pat Kissinger Belt LinkedIn tel to reverse the current wafer foundry pattern through innovative technology, and will try to produce chips smaller than 2 nanometers. As for why Germany was chosen, Intel noted that Germany is the ideal place to build a large base with ample talent and infrastructure, as well as an existing ecosystem of suppliers and customers.

According to Intel's plan, this expansion plan will create more than 7,000 jobs in Germany during the construction of the factory, and provide more than 3,000 permanent jobs after completion.

According to relevant reports, Intel is not advocating for German factories, the company has set ambitious goals in terms of processes below 10nm. Pat Kissinger has revealed that Intel's goal is not to conquer 5nm within 5 years, but to achieve mass production of 2nm chips in 2024. "Today we predict that for the next decade, we will stay even faster than Moore's Law. As stewards of Moore's Law, we will persevere in our innovation path. Pat Kissinger once said at Intel's online innovation event.

Intel's six european bases

In response to Intel's European investment plan, EU Internal Market Specialist Thierry Breton praised it as a "real European project."

With the disclosure of Intel's German plant plan, Intel's strategic layout in Europe has taken shape. Intel will continue to invest $36 billion to build six chip bases in six countries in Europe: Germany, France, Ireland, Italy, Poland and Spain. Among them, in addition to this advanced chip manufacturing plant in Germany, Intel will also set up a new chip research center in France, expand the existing Intel Northern Ireland factory, and negotiate with the Italian government to build a new chip packaging factory. Therefore, Intel's six bases in Europe will have the ability of the whole industry chain from chip research and development design to production and packaging, empowering the development of the local semiconductor industry in Europe.

Reuters said Intel would set up its own research and development centers and factories in different countries in Europe and would help it get subsidies from more EU member states. German factories account for more than half of Intel's $36 billion investment, though Intel hasn't said how much the German government subsidizes them.

According to Intel's plan, the company will continue to invest 80 billion yuan (about $88 billion) in Europe in the next decade, and the reason why it is so ambitious is because European countries want to introduce Intel, drive the local chip industry development, and provide it with attractive government subsidies.

Will Europe be like the United States?

However, although the current momentum is huge, these plans can eventually land, and a big question mark needs to be marked at this time.

We all know that Intel's investment plan and the EU Chip Act, which is currently advocated in Europe, are highly compatible. The EU Chip Act mentions that the process level of improving the chip production capacity of EU countries will be included in the scope of important goals, that is, by 2030, it will be able to produce chips of 2 nanometers and below to meet their own and world market demand. By 2030, the EU plans to increase its share of global chip production from the current 10 percent to 20 percent.

At the same time, the EU Chip Act also plans the EU's related funding for this ambitious plan, allowing public funds to support Europe's "pioneering" chip production, which is divided into two parts: public investment totaling 30 billion euros to support existing semiconductor research and related innovation projects; and private investment of about 15 billion euros.

The EU's determination can be seen, and the adoption of legislation to promote chip development has brought more guarantees to the advancement of the overall plan.

However, in recent times, we have seen many countries and regions with grand plans for chip development, including the US Competition Act of 2022. Of the $300 billion grant approved by the U.S. Competition Act of 2022, $52 billion is used to subsidize semiconductor manufacturing and research on critical components for automobiles and computers.

Driven by the U.S. Competition Act of 2022, TSMC, Samsung, and Intel have all proposed plans to build factories in the U.S. and intend to invest huge sums of money. Among them, TSMC's planned investment is $12 billion, with the goal of introducing 5nm into the United States; Samsung's planned investment is $17 billion to build a leading 3nm factory in Taylor, Texas; Intel's initial planned investment is $20 billion, which is the largest investment in Ohio history, while Intel's continued investment plan is to invest $100 billion in the United States over the next 10 years.

But the problem is that, in addition to Intel's clear statement that the $20 billion it invested upfront is not affected by government subsidies, company spokesman William Moss noted that investing $100 billion in 10 years would be difficult to complete without the help of U.S. federal subsidies. TSMC and Samsung's upfront investment are more dependent on government subsidies, and it is reported that the two companies are currently slow to build factories, an important reason is that the promised subsidies are not in place.

The United States is like this, so can the EU, which is made up of member states, really work together on the matter of paying for it?

To solve the problem of money, as well as the problem of talent, the solution proposed by the American think tank CSET is to introduce more than 3,500 talents from factories in other areas of TSMC. Did Europe also demand that these big factories "tear down the western wall and make up for the eastern wall"?

The road of introduction does not work on the mainland

Regardless of whether the US Competition Act of 2022 on chip manufacturing or the EU's EU Chip Act ultimately achieves its goals, this approach to adoption will not work for the chip manufacturing industry in Chinese mainland.

Some people may say, didn't we introduce TSMC from Taiwan? However, the most advanced TSMC Nanjing plant is only 28nm, which is not as good as SMIC from the technical level. If we look at it in a dialectical relationship, TSMC Nanjing Factory is a compression of growth space for the continental wafer foundry industry, which is why the expansion of TSMC Nanjing Plant will cause great controversy.

However, for the development of local chip manufacturing, we must not be tied to it, and increasing investment in existing chip manufacturing factories is a road that requires continuous and determination, and this road is bound to be difficult, and it will take years and decades. At the same time, we must also seek a broader path according to our own characteristics, when the UCIe standard led by international giant manufacturers is still in a "chaotic state", the domestic rapid response to the introduction of chiplet standard draft is a wise choice, in the cutting-edge scientific and technological innovation at the same time, how to use existing technology to do innovation, is the domestic chip industry needs to consider the problem.

And like Intel, tens of billions of dollars, all of a sudden is a 2nm plan, not suitable for us.