Intel To Invest Up To $95 Billion in European Chip-Making Amid US Expansion (wsj.com) 32
Intel plans to build new chip-making facilities in Europe valued at up to $95 billion, responding to a cross-border race to add manufacturing capacity at a time of a global chip-supply crunch. From a report: Intel Chief Executive Officer Pat Gelsinger Tuesday said the company was planning two chip factories at a new site in Europe and could potentially expand it further, with the increases raising the total investment over about a decade to the equivalent of as much as 80 billion euros. The facilities would cater to meteoric demand for semiconductors as computers, cars and gadgets become more chip-hungry. "This new era of sustained demand for semiconductors needs bold, big thinking," he said at an auto-industry event in Munich.
Rival Taiwan Semiconductor Manufacturing Co., the world largest contract chip maker, this year said it would spend a record $100 billion over the next three years to increase production capacity. South Korean rival Samsung Electronics last month said it plans to boost investments by one third to more than $205 billion over the next three years, in part to pursue leadership in chip manufacturing. The global chip shortage has hit auto makers particularly hard. Ford Motor and General Motors last week said they were curtailing production because of a dearth of chips. Japan's Toyota Motor last month said that it would cut production by 40% world-wide in September. Intel said it plans to commit manufacturing capacity at a factory in Ireland to the auto-chip sector. And it is standing up a chip-design team to help others adapt designs so they can use Intel's manufacturing capabilities. Intel's contract chip-making business has been courting potential customers in Europe, including automotive companies, the company said Thursday.
Rival Taiwan Semiconductor Manufacturing Co., the world largest contract chip maker, this year said it would spend a record $100 billion over the next three years to increase production capacity. South Korean rival Samsung Electronics last month said it plans to boost investments by one third to more than $205 billion over the next three years, in part to pursue leadership in chip manufacturing. The global chip shortage has hit auto makers particularly hard. Ford Motor and General Motors last week said they were curtailing production because of a dearth of chips. Japan's Toyota Motor last month said that it would cut production by 40% world-wide in September. Intel said it plans to commit manufacturing capacity at a factory in Ireland to the auto-chip sector. And it is standing up a chip-design team to help others adapt designs so they can use Intel's manufacturing capabilities. Intel's contract chip-making business has been courting potential customers in Europe, including automotive companies, the company said Thursday.
Is this the same Pat Gelsinger... (Score:2)
that implored Lesley Stahl of "60 Minutes" that we must have more taxpayer-paid US government financing of fabrication facilities in the United States ? Just asking for a friend.
Re: (Score:2)
Yes. But in today's globalized world where globalization is waning and protectionism is waxing, the real key is to have manufacturing wherever your customers are.
That's why Intel is building new fabs in Arizona, Poland, Germany, India, and China. So that they don't have to export and import anymore, and can manufacture a full server wherever you are with minimal shipping.
Re: (Score:1)
It's probably "cleaner" than manufacturing everything in one place and shipping it everywhere as well.
Re: (Score:2)
Re: (Score:1)
Can't grow bananas in Norway though.
Re: (Score:2)
Iceland [hortidaily.com] sure can.
Re: (Score:1)
There's also other factors like better regulation, cleaner energy sources, better regulation on the mining of materials etc..
Re: (Score:2)
Re: (Score:2)
Funny how economies of scale lead to economies of capture.
Re: (Score:2)
Yes, isn't it. But both are needed, it is rather bad to put all of one's eggs in a single basket.
Re: (Score:2)
Intel is building new fabs in Arizona, Poland, Germany, India, and China. So that they don't have to export and import anymore, and can manufacture a full server wherever you are with minimal shipping.
Where are they going to get all the non-IC parts? China? Oh yeah.
Re: (Score:2)
Not available from China right now.
I bought my 18 year old son an electric moped for graduation. It was due to be shipped in July. Held up due to batteries being stuck in Taiwan behind a customs wall. Who knows if I'll ever see it.
A lot of non-IC parts aren't making it through right now, and have been held up since before COVID-19.
I expect other manufacturers are solving that problem though- capitalism is very good at working around such barriers.
Paywall alert (Score:1)
Link is paywalled, don't click.
Are we (and our politicians) really that naive? (Score:3)
Rest assured that they'll cash in a lot of aid and assistance to build those plants, after all, they create a lot of manufacturing jobs, right? How great! Manufacturing is coming back to Europe! Rejoice and stuff their asses full of money because it will all come back in the form of taxes, and even if not, it's jobs. JOBS!
For 2 or 3 years, afterwards the manufacturing crunch is over and everything's back to normal. In other words, the jobs are gone again and so is the money. If you just paid your citizens to stay home and jack off, it would probably have been cheaper.
Re: (Score:2)
It's more than just JOBS. It's manufacturing in a stable country which is why you'll never see such a thing in Afghanistan.
Re: (Score:2)
China and India are stable and cheap enough.
Re: (Score:1)
Yes and no. Europe (most of it), has decent protections from legal perspective for foreign companies and investors. Much less chance of dealing with corrupt official as in India or regulations that are straight up hostile to foreigners like in China. Though companies overcome both of those hurdles, and there is still expansion everywhere (someone above mentioned they are opening new fabs in China), it just makes more sense to expand more long term manufacturing in places that are more stable. 100bn for Euro
Re: (Score:2)
China and India are stable and cheap enough.
For what? To steal all your data and sell it to the highest bidder? What's your recourse if they do? Sit in the corner and cry? Yeah, that's what I thought.
Re: (Score:2)
Don't ask me, ask our corporations. I know it's dumb as fuck, but apparently managers know something I don't.
Maybe that their contract expires before the Chinese can produce what they cribbed.
Ugh... (Score:4, Interesting)
Of course, there was a time when much of GF belonged to IBM and IBM is/was a key player in semiconductor technologies. But unlike Intel and IBM who can support a major loss due to a process shift gone horribly wrong, GF is basically a single product company and any catastrophe like the one Intel faced not long ago (with a hit of $12 billion or so) would destroy them. Slow and steady wins the race.
I live in Norway, a country that can easily lose $100 billion and recover from it without much heartache. And I've been saying since GF made their announcement to pause at 14nm that the Norwegian government should buy them and invest in making them a real competitor to TSMC. Even better, GF has a few really great fabs in Europe already and I'm sure the Norwegian government could have struck a deal which could have made semiconductors Norway's new oil.
I was told by many people that there's no future in that.
If Norway would have done that, there would have been 6-10 quarters of losses, and then a rain storm of money splashing down on the sovereign wealth fund and Norway, who has a surprising amount of people skilled in fab technologies could have secured another 50 years of wealth rather than always investing in companies in other countries since the Norwegian government lacks faith in their own people.
Re: (Score:2)
While Norway does have the largest sovereign wealth fund, Abu Dhabi has the third largest. If continued ownership of GF is too costly for Abu Dhabi, do you really think that a factor of two makes it affordable to Norway?
Re:Ugh... (Score:4, Interesting)
Samsung is way ahead of Intel, and Intel is ahead of GlobalFoundries. AMD spun off GlobalFoundries because they realised it would be too costly to keep up in process technology while vertically integrated. GlobalFoundries can, in theory, amortise the costs of upgrading process technology across fabrication for multiple customers.
No, Global Foundries was never part of IBM. AMD spun off their semiconductor manufacturing division as GlobalFoundries in 2009.
You've got your basic facts wrong. I wouldn't give much weight to your conclusions.
Re: (Score:2)
GlobalFoundries took over IBM's chip manufacturing operations in 2015, and was actually paid $1.5 billion to do so. A substantial part of what is now GlobalFoundries (two fabs anyway) once belonged to IBM, although Fab 10 is apparently now going to be transferred to ON Semiconductor.
In 5 years... (Score:1)
... Global Foundries, TSMC, Samsung, Intel, etc. will be crying a river about the oversupply in the market and how they need tax dollars to remain competitive.
Of the fabs being discussed today, In 5-years I'll bet less than half will have actually broken ground. Of the ones that break ground, less than half will be completed as a chip foundry. Of the half that are completed, half again will still be producing chips.
Meaning, 10-15% of the new capacity being discussed today will be realized and continue to
Re: (Score:2)
I have a brand new never used Xeon Gold 6138, do you think will get a much today as you did three years ago? Many chips do in effect go bad because they depreciate in value which from an economic perspective is the same thing.
Re: (Score:1)
Precisely. This is *screaming* pork cycle [wikipedia.org].
Somebody's gonna make some McRibs in five years. There's probably a good way to make money hidden in there.
European Chip Making (Score:2)
French or Belgian style?
Re: (Score:1)
Belgian, or die in a grease fire! ;)
(Seriously, if you haven't yet, go there, and try them. Bintje potatoes, fresh, not frozen, 11-13mm thickness, fried in beef drippings at low heat, cooled off, then fried again on higher heat. Proper sauce on the side, not ketchup. They literally have a president of the union of places that make fries. Accept no substitutes. Oh, and try both types of their waffles too, and the chocolate, and the beer. But beware: Miss one highway exit, and you're out of the country again.
INB4 Euro politicians being in Intel's pockets, (Score:1)
proclaiming that we all should buy Intel and it's so much greater than AMD.
Especially now that Germany can mandate its own backdoors being put in.
(Kidding. Knowing my country's intelligence and its recent history, they will bend over backwards to the NSA again, and go "Yes, massa! Right away, massa!". It will still be the NSA's backdoors.)
Wishful thinking (Score:2)
From TFA:
Western governments historically have offered limited incentives to chip-makers, even as Asian countries eager to build up their domestic industries dangled free land, discounted utilities and tax breaks. That led to a shift in the industry toward [Asia]...
Right. Free land and free water made Asian semiconductor companies successful, and not the inability for western tech firms to look beyond the next four quarters....Good job WSJ. Very neutral and insightful.