Italy and Intel Veneto Choose the Preferred region for the new Chip Factory

Intel’s investment in Italy is part of a broader plan announced by the US chipmaker last March.

Rome: The outgoing government of Mario Draghi and Intel Corporation has chosen the city of Vigasio in the northeastern Veneto region as the preferred location for a new multibillion-euro chip factory in Italy, two people familiar with the matter said.

Intel’s investment in Italy is part of a broader plan announced by the US chipmaker last March to invest up to 80 billion euros ($77.5 billion) over the next decade in building capacity across Europe.

The initial investment is expected to rise by around €4.5 billion over time, and Intel said the Italian plant will create 1,500 jobs, as well as another 3,500 among suppliers and partners, with operations starting between 2025 and 2027.

The Italian plant will be an advanced semiconductor assembly and packaging plant, using new technologies to weave whole wafers from tiles.

The sources, who asked not to be named because of the sensitivity of the matter, said the sides had worked out the details of a comprehensive deal in early September, but the general election results would not be announced on Sunday.

An Intel spokesman declined to comment because the negotiations are confidential and ongoing. Draghi’s office also declined to comment.

Located near Verona on the strategic Brenner Highway and Rail, Vigasio is a preferred choice from a list of two locations that also include one in the Northwest Piedmont region.

One source added that the site is well connected to Germany, particularly the city of Magdeburg, where Intel will build two factories, among other reasons.

Intel and the government initially also considered sites in the Lombardy, Puglia, and Sicily regions.

Draghi’s close advisers aim to engage in behind-the-scenes negotiations with his potential successors to avoid any risk to the deal from the new Italian government, the people said, adding that the choice of location is politically sensitive.

All opinion polls expected the Georgia Meloni-led Italian Brotherhood to emerge as the leading party on Sunday and share power with its allies, the League, led by Matteo Salvini, and Forza Italia led by Silvio Berlusconi.

The sources declined to give further details, but Reuters previously reported that Rome is ready to finance up to 40% of Intel’s total investment in Italy.

One of the sources said that the state’s contribution to Intel’s investment program is something that must necessarily be shared with the next government before any deal is finally finalized, adding that Draghi may allow the next government to announce.

To boost its domestic chip industry, Rome is also in talks with Franco-Italian STMicroelectronics, Taiwanese chipmaker MEMC Electronic Materials Inc and TSMC (2330. TW), and Israel’s Semiconductor Tower (TSEM.TA), which was acquired by Intel earlier this year.

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