Intel CEO Pat Gelsinger

Intel has plans to build at least two new advanced chip factories in Europe. This will involve an investment of some 80 billion euros over the next ten years, according to the company. Where the factories will be located is not yet known. The American company is reportedly in talks with parties in the Netherlands, Belgium, Germany, France, and Poland. The location should be known later this year. The existing factory on the company’s Leixlip campus in County Kildare, Ireland, will also be expanded.

Due to a global chip shortage, there are currently major delays, including in the automotive sector, in the delivery of products that run on chips. Intel expects global chip demand to only grow and, like competitors TSMC and NXP, is looking for solutions.

Intel CEO Pat Gelsinger

In his speech at the IAA trade show in Munich, Intel CEO Pat Gelsinger revealed that the automotive industry in particular is desperate for chips. Intel expects semiconductors (chips, that is) to account for 20% of the material cost of new cars by the end of the decade, thanks to increased demand for premium and electric cars with advanced driver assistance technology. Today, that figure is only 4%. Gelsinger addressed the automotive industry directly during his presentation: “You need us and we need you… So there is a common interest in creating an innovation hub in Europe.”

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According to Gelsinger, the logic for increased chip production also lies in the presence of a strong ecosystem. In doing so, he cited ASML, Zeiss, imec, and Fraunhofer, among others, as “catalysts for the sector.”

Intel CEO Pat Gelsinger, during his keynote in Munich, shows how strong the semiconductor ecosystem in Europe still is.

Demand for semiconductors is also increasing outside the automotive sector. Gelsinger predicted that the total automotive semiconductor market will nearly double to $115 billion by the end of the decade, accounting for more than 11 percent of the total semiconductor market. This trend is driven by what Gelsinger calls “the digitization of everything.”

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Author profile picture Bart Brouwers is co-founder and co-owner of Media52 BV, the publisher of innovationorigins.com.