The ongoing global chip shortage has created massive economic disruptions aside from what we’ve experienced with graphics cards. While many country’s leaders likely couldn’t care less about whether or not gamers are able to play the latest games with ultra settings, they certainly do notice how it disrupts professionals and other staple economic sectors like the automotive industry. The complications over the past year and a half revealed supply chain vulnerabilities that many would like to see addressed. Intel is certainly happy to oblige in that regard, and has expressed interest in major investments and foundry locations based in Europe.
In a recent interview with the Financial Times, Intel outlined a plan to build chip factories and supply chain networks in Europe to address ongoing and future demand. There are plenty of details to comb through about the complex proposal, but the takeaway is that the company is serious about strengthening its presence in Europe — $100 billion USD serious.
The blue wave
The idea is that Intel will create an initial $20 billion USD fab somewhere in Europe based upon the results of negotiations with governments. Intel wants subsidies to help it achieve its goals across various production phases with the ultimate goal to create a massive production complex valued at $100 billion USD. This would work similar to how TSMC does things, allowing the company to move talent around the various facilities as needed to keep things running to schedule.
In addition to the manufacturing facilities, Intel would create a supply chain to support it. That alone would offer significant economic value to Europe and help to decentralize reliance on southeast Asia for everything chip related.
Dealing with governments is no easy process, but the problems that currently exist with chip manufacturing are impossible to deny. It’s possible this plan is just crazy enough to work. Actually, Intel’s plan to build a large chip foundry in Europe is one of the sanest things we could do at this point to prevent another shortage of this severity.
Regardless of whatever becomes of this particular plan, Intel is also working with the US government to create more factories in Arizona. The need for computer chips is rapidly growing with the rise of machine learning. If we’re going to have self-driving refrigerators and mining industries for e-coins based upon dog memes, we’ll need all the capacity we can get.