Intel reportedly nearing $5 billion deal with Italy to build chip plant

What you need to know

• Intel and Italy are reportedly close to a $5 billion deal that would see the tech giant build a chip plant in Italy.
• Intel plans to invest upwards of $88 billion toward building chips in Europe in an effort to diversify its supply chain.
• The chip factory will potentially be in the northern regions of Piedmont or Veneto, though the Lombardy, Apulia and Sicily regions were reportedly looked into initially.

Intel will likely build a chip factory in Italy following a $5 billion deal with the country, according to a recent report by Reuters. Sources told the outlet that Intel will create a plant in Italy as part of its overarching $88 billion effort to diversify its supply chain. At the moment, Intel and other chip manufacturers rely on Asian manufacturing. A $5 billion deal with Italy would help Intel spread its manufacturing load across another region.

Earlier this year, news broke that Intel would heavily invest in the European Union when it comes to semiconductor manufacturing. Italy is just one of the planned countries that Intel will expand in, alongside Germany, Poland, and Spain.

Reuters spoke with multiple sources that chose to remain anonymous about the impending deal between Intel and Italy. According to the outlet, Prime Minister Mario Draghi aimed to have an agreement in place before the end of August. A snap national election will be held in Italy on September 25, 2022.

Rome would fund up to 40% of Intel's investment in Italy, according to Reuters' sources. The investment in Italy was initially expected to be $5 billion but will likely rise.

The northern regions of Piedmont and Veneto are reportedly among the finalists for the chip plant. The Lombardy, Apulia, and Sicily regions had been considered initially, according to Reuters.

A similar investment was announced regarding a chip fab in Magdeburg, Germany earlier this year.