The technology company has announced an investment of 20,000 million in the start-up of two new facilities in Ohio.

The technology company has announced an investment of 20,000 million in the start-up of two new facilities in Ohio.

The technology company has announced an investment of 20,000 million in the start-up of two new facilities in Ohio.

Image of a semiconductor.

Europe is losing the semiconductor race. After a summer in which many news pointed out that the great giants of the industry had important announcements to make in order to build facilities to manufacture this type of component in the Old Continent, the United States has hit first. Intel will spend more than $20 billion to start up two new semiconductor plants in Ohio.

This decision is not incompatible with the project for Europe, but it sends a clear message: the European Union (EU) is not being able to show itself as an attractive territory for the manufacture of these strategic components for many industries. It is still expected that, throughout the year, Intel will reveal its plans for Europe but, for now, they will have to wait.

According to initial estimates, Intel would be willing to invest more than 90,000 million euros over the next 10 years to strengthen their productive capacities. Its objective would be to have two locations that would provide the muscle necessary for European needs to be satisfied.

Waiting for the Chip Act

Patrick Gelsinger, chief executive of Intel has explained that the plans of the European factory have not vanished. “I hope that the European Union ends its Chip Law and that it will allow us to carry out an important announcement coming soon“, he pointed out.

This new legislation aims to reduce the foreign dependency that the continent has on these components. A situation that has been aggravated in recent months due to the bottlenecks that have been generated in the context of the pandemic. Currently, the vast majority of suppliers in key sectors such as the automobile industry are located in Asia, which is causing very serious problems of shortages to the main European firms.

The origin of this crisis is in the first scourges of the coronavirus. When the first lockdowns were declared, auto companies gave up planned semiconductor orders. These companies work with a model called just in time for which only the components necessary to satisfy the demand are worked on. For years practically 100% of the cars that were manufactured already had an owner. Seeing that the demand for vehicles would drop radically, the companies gave up having stocks of all kinds of components, including semiconductors.

In parallel, other industries such as IT or telecommunications increased their orders due to the explosion in demand of devices due, precisely, to confinement. When automakers resumed orders months later, they were at the end of a queue. With the aggravating circumstance that the demand for these components had multiplied several times while the production capacity could not grow any more.

Announcement at the end of the year?

If the times follow the marked scheme, The European Commission will have the Chip Law ready at the end of February. The approval process could take much of the year. This schedule makes it difficult for any major semiconductor announcements to be made before the end of the year. Given the magnitude of the necessary investments, no player will implement their plans without knowing the new regulation in detail.

Germany, France and Italy start in the lead to get hold of this facility. A race that it seems that Spain will not be in a position to compete. The plans in this sense seem to be more humble and, at the same time, more aligned with the needs of the Spanish automobile industry. In fact, the PERTE of the electric and connected car will have specific calls for projects of this nature, but it will have investments far removed from those necessary.

At this point it is important to emphasize that the decisions made today will not have a real impact in the short term. From its approval until an installation of this type reaches its maximum capacity, it can take between three and five years, according to the sector.

Thus, the traditional lack of administrative flexibility re-introduces himself as the main Achilles heel for Europe when it comes to presenting itself as an attractive territory for the start-up of state-of-the-art industries. If to this is added the Let them invent! of Unamuno in which the European strategic vision seems to be submerged, it seems difficult for the continent to be in a position to shake off the label of “old” in the short term. Something that will irremediably mark the future of both the key industries and the new generations of Europeans.


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