Advanced Computing in the Age of AI | Thursday, March 23, 2023

Intel Invests €33B in Europe’s Semiconductor Supply Chain 

Intel has announced that it is making an “initial” €33 billion (~$36 billion) investment across the semiconductor value chain in Europe. The investment — which spans R&D, manufacturing and packaging — comes at a time when sovereignty is, more than ever, a headline priority for the continent.

What was announced?

A “Silicon Junction” in Germany with two new fabs

There are a few key components to Intel’s announcement — some more concrete than others. First, and constituting the plurality of the investment: a €17B “leading-edge” semiconductor megasite in Magdeburg, Germany (an early rendering of which is pictured in the header). Intel says that the city — which they identified after a year of location scouting — will host two first-of-their-kind semiconductor fabs. Referring to this planning development as the “Silicon Junction” (and recalling how Intel “put the ‘silicon’ in ‘Silicon Valley’”), Intel CEO Pat Gelsinger noted that permits and additional financial support still need to be secured, but said that Intel hopes “to break ground in the first half of 2023 and produce leadership products in 2027.” The fabs will support Intel’s own products as well as Intel Foundry Services products.

Gelsinger said that the Silicon Junction investment is anticipated to generate 7,000 construction jobs, 3,000 permanent high-tech jobs at Intel and tens of thousands of jobs across partners and suppliers. “This will be the largest investment in the history of Saxony-Anhalt,” said Reiner Haseloff, prime minister of Saxony-Anhalt, the German state of which Magdeburg is the capital city. “An investment of this size and the creation of many thousands of new jobs constitute a quantum leap for our state.”

Another rendering of the Magdeburg facilities. Image courtesy of Intel.

A fab expansion in Ireland

Intel’s next-biggest announced investment is an extension of a prior investment — €12B additional for its fab in Leixlip, Ireland. Intel first invested in Ireland in 1989, manufacturing its first chips on the isle in 1993. The additional €12B will go towards the under-construction Fab 34 facility, which Intel says will double manufacturing space for Intel Ireland and enable production of the Intel 4 process technology. The new investment brings Intel’s total investment in Intel Ireland from €18B to €30B.

Intel’s ongoing expansion of its Leixlip campus. Image courtesy of Intel.

A new manufacturing facility in Italy

Third: Italy. “Intel and Italy have entered into negotiations to enable a state-of-the-art backend manufacturing facility,” Gelsinger said. “With a potential investment of up to €4.5 billion, this factory would create approximately 1,500 Intel jobs plus an additional 3,500 jobs across suppliers and partners. Intel and Italy aim to make this facility a first of its kind in the EU with new and innovative technologies.” Gelsinger said that this facility is scheduled to start operations somewhere between 2025 and 2027.

“This would be in addition to the foundry innovation and growth opportunities Intel expects to pursue in [Italy] based on its planned acquisition of Tower Semiconductor,” Gelsinger added. Intel announced its plans to acquire Tower Semiconductor for $5.4 billion last month; the company has a major partnership with STMicroelectronics, which itself operates a fab in Italy.

An HPC and AI R&D hub in France

France, meanwhile, will become “Intel’s European R&D hub,” Gelsinger said, via a campus in Plateau de Saclay that he said would create 1,000 high-tech jobs — 450 of them by the end of 2024. “France will become Intel’s European headquarters for high-performance computing and AI design capabilities,” he said. “We also plan to establish our main European foundry design center in France, offering design services and collaterals to French, European and worldwide industry partners and customers.”

… and more in Poland and Spain.

And the rest: “In Poland, we are currently increasing our lab space in Gdansk by 50 percent, where we will develop solutions in the fields of deep neural networks, audio, graphics, datacenter and cloud computing,” Gelsinger said, adding that the expansion was planned for completion by 2023. “And in Spain, we’ve been collaborating with the Barcelona Supercomputing Center [BSC] over the past decade on exascale architecture and we are now working on zettascale architecture for the next decade. We plan to establish joint labs to advance computing.”

On this last point: Intel, of course, is supplying most of the hardware behind the Aurora exascale supercomputer, which the company says will deliver in excess of two peak exaflops of double-precision compute after its planned arrival in 2022. Zettascale — 1000× exascale — was first meaningfully mentioned by Intel at SC21, and Raja Koduri (senior vice president and general manager of the Accelerated Computing Systems and Graphics Group at Intel) since clarified in an interview with Ian Cutress that yes, they do in fact mean a zettaflop of double-precision, 64-bit compute power when they say “zettascale.” BSC makes sense as a zettascale development partner for Intel, as the center’s computing efforts have a particular focus on the development of next-gen computing technologies.

The headline is “sovereignty”

Intel’s investment comes at a decisive moment for Europe and, more specifically, the European Union. The EU’s desire for greater sovereignty is the computing supply chain is nothing new: the European Processor Initiative was incepted in 2015, and EuroHPC stretches back to 2018 with the roots of the program dating to 2017.

Recent developments, however, have thrown that existing desire into a fever pitch. Covid first, with the disruption of Asian supply chains as major manufacturing hubs shut down operations; but then, the invasion of Ukraine — a disruption that is, of course, being acutely felt by western Europe. This was not lost on Gelsinger, who opened his announcement by noting Intel’s concern over the “ongoing and troubling war in Ukraine and the tragic events unfolding by the hour.”

“The recent chip shortage has reminded us of the risks of being too dependent on any one region in the short term,” he later added. “Today, 80 percent of chips are produced in Asia. Our landmark pan-European investment addresses the global need for a more balanced and resilient supply chain.” Olaf Scholz, the new chancellor of Germany, echoed these words in his response to Intel’s announcement, saying that “the first-of-its-kind fab site in the EU will help rebalance global silicon capacity and create a more resilient supply chain.”

The Intel announcement comes directly on the heels of last month’s proposal of the EU Chips Act, which aims to put €43 billion of public and private funding toward strengthening the European semiconductor supply chain by 2050. Ursula von der Leyen, president of the European Commission, called Intel’s investment “the first major achievement under the EU Chips Act.” (It should be noted that the act has yet to be formally approved.)

“A month ago, the Commission presented the European Chips Act,” von der Leyen said. “With this act, we want to make Europe a leader in the global semiconductor production, and we also want to strengthen our resilience with homegrown, secure technologies which are invaluable assets in the turbulent world we live in. Our goal is to have 20 percent of the world’s microchips production in Europe by 2030.”

European Commission President Ursula von der Leyen comments on the Intel announcement. Image courtesy of Intel.

“[Intel’s investment] is a considerable contribution to the European chips ecosystem that we are building right now,” she added. “It will create new, well-paid jobs throughout Europe and I’m sure that it will pave the way for more companies to follow suit. … My message is simple: Europe is a powerhouse of innovation. We have some of the best minds and talents in research and development. We have skilled workers. We have a stable and attractive market. And we are open for business.”

“Our planned investments are a major step both for Intel and for Europe,” Gelsinger said. “The EU Chips Act will empower private companies and governments to work together to drastically advance Europe’s position in the semiconductor sector. This broad initiative will boost Europe’s R&D innovation and bring leading-edge manufacturing to the region for the benefit of our customers and partners around the world. We are committed to playing an essential role in shaping Europe’s digital future for decades to come.”

Gelsinger also declared Intel’s commitment to helping the EU achieve its sustainability goals through its investment. “A state-of-the-art semiconductor ecosystem will support the green transition and help deliver the European Green Deal,” he said. “In line with the EU’s climate targets, Intel will power all new European sites with 100 percent renewable energy and align our corporate goals to achieve net-positive water use and zero total waste to landfill.”

It’s a busy year for Intel so far. Just two months ago, Intel made another fab announcement — in that case, for the U.S. “In January, we announced plans for an initial investment of more than $20B in the construction of two new leading-edge chip factories in the US state of Ohio,” Gelsinger said. But this investment in Europe, he added, was of a much larger scope. “It’s bigger than one or two fabs.”

Header image: early plans for the two new fabs in Magdeburg, Germany. Image courtesy of Intel.

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