Since Taiwan presently supplies more than 90% of the world's advanced chips, nations are attempting to diversify.
According to Reuters, US chipmaker Intel is nearing an agreement with Italy to construct a cutting-edge factory there for the manufacture of semiconductors. The investment is part of a larger plan to increase chip production in the EU to reduce reliance on Asia.
According to sources cited by Reuters, the $5 billion transaction for the semiconductor packaging and assembly plant will be paid in the beginning. The agency stated that it seemed likely that the deal would be achieved before the end of August.
The investment in Italy is a part of a larger strategy by Intel, the biggest producer of semiconductor chips in the world based on revenue, to invest $88 billion in expanding capacity across Europe to decrease its reliance on chip imports from Asia, particularly in light of the current tensions between China and Taiwan.
Taiwan Semiconductor Manufacturing Co. (TSMC), the largest semiconductor foundry in the world, generates more than 90% of the most cutting-edge semiconductors used in the international market.
The coronavirus pandemic's impact on the global chip supply crisis has reduced Europe's strategic automotive industry's output. Computers, home appliances, and many other products employ semiconductors as well.
Rome is prepared to contribute up to 40% of Intel's overall investment in Italy, which is anticipated to increase over time from the initial $5 billion, according to a previous report from Reuters.
The European Union aims to build cutting-edge semiconductor facilities there. Under the terms of the Chips Act, the European Commission made policy-driven investments totaling more than €43 billion accessible until 2030.