German State of Bavaria and Intel in Talks to Build European Megafactory

Reuters is reporting that the German state of Bavaria is in talks with Intel regarding the creation of a European chip facility that would help counter the supply issues currently being faced by the automatic industry. A local economy minister revealed the information last Friday.

Intel is reportedly seeking €8 billion or $9.5 billion in subsidies to support the creation of the facility although Intel has stated that they have not provided any official amount. Intel isn’t also the first company to be approached to help in the chip supply as TSMC was first followed by Samsung.

“I strongly support this,” – Hubert Aiwanger, Economy Minister

Aiwanger continues that a large international semiconductor manufacturer in Bavaria is an oustanding opportunity. Bavaria is also home to luxury automotive company BMW.

Just like in the USA, the EU is also experiencing its own chip shortages for its car manufacturers which is heavily affecting industries including Germany especially as the country is rising back from the pandemic slump.

Meanwhile, should this proceed, Intel will have its second megafactory in the decade as they pursue their IDM 2.0 model. Intel is now heavily focused on becoming a contract chip maker much like TSMC and Samsung. CEO Pat Gelsinger has been very adamant on this change and is actively seeking partnerships like the ones that Bavaria is also pursuing.

Intel received $20 billion to build a new US megafactory alongside Samsung. These new factories not only should improve chip supplies but also provide more jobs in the  local area.