In June, the tech giant announced plans for new semiconductor plants in Poland and Germany. 

Intel has announced the construction of a US$4.6Bn semiconductor plant in Poland and upped its investment in two new semiconductor plants in Germany. 

According to Reuters, the deal in Poland comes after the country started courting Intel in July 2021.  Intel's new facility will be on a 285-hectare plot in Wroclaw. The government will in invest in new roads to the factory, electric buses, a water treatment facility, and high-voltage power lines. Intel has over 30 years of operation in Poland, including significant research and development operations in Gdańsk, the company’s largest R&D facility in Europe with nearly 4,000 workers.

Meanwhile, Intel is to up investment in two new semiconductor plants in eastern Germany from US$18.5Bn to US$33Bn in exchange for higher government subsidies for the project. Earlier this year, Intel demanded the government increase the level of financial support for the project to at least US$11Bn, citing increased construction and energy costs.

Intel’s planned leading-edge wafer fabrication site in Magdeburg is the largest foreign investment in Germany’s history and is seen as pivotal to EU plans to double its share of the global semiconductor market from less than 10% in 2023 to 20% by 2030. Nevertheless, the news that the tech giant was demanding more government support met with some opposition in Germany with some questioning the potential for return on investment. 

The Intel news highlights how government incentives and finances are being mobilised towards bringing semiconductor production capacity to the West. Recent global disruptions, and the high concentration of the market in Asia, have led policymakers to try and expedite the buildout of more resilient supply chains for semiconductors. In the USA, the CHIPS and Science Act represents the central federal policy related to semiconductors and provides roughly US$280Bn in new funding to boost domestic research and manufacturing of semiconductors in the USA. In Europe, the European Chips Act, similarly seeks to address semiconductor shortages and will mobilise more than US$47Bn of public and private investments.