Outgoing Mario Draghi’s government and Intel have chosen the town of Vigasio in the northeastern Veneto region as the preferred site for a new billion-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 (roughly Rs 6,27,930 crore) over the next decade in building capacity across Europe.

With an initial investment of around 4.5 billion euros (roughly Rs 35,340 crore), which is expected to grow over time, Intel said the Italian plant will create 1,500 jobs plus an additional 3,500 jobs across suppliers and partners, such as operations will start between 2025 and 2027.

The Italian factory will be an advanced semiconductor packaging and assembly plant, using new technologies to splice full wafer chips.

The sources, who asked not to be named because of the sensitivity of the matter, said the parties had reached a detailed comprehensive agreement in early September, but no public announcement would be made before the result of Sunday’s general election.

An Intel spokesman would not comment because negotiations are ongoing and confidential. Draghi’s office also declined to comment.

Located near Verona, on the strategic Brenner motorway and railway, Vigasio is the preferred option from a list of two sites, which also includes one in the northwestern Piedmont region.

Among other reasons, the site is well connected to Germany, and in particular to the city of Magdeburg, where Intel will build two factories, one of the sources added.

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

Close associates of Draghi are seeking to enter behind-the-scenes talks with their likely successors to avoid any risk of the deal being challenged by Italy’s new government, the people said, adding that the choice for the site was highly sensitive politically.

Opinion polls predicted that Giorgio Meloni’s nationalist Brothers of Italy group would emerge as the leading party on Sunday and share power with its allies the League, led by Matteo Salvini, and Silvio Berlusconi’s Forza Italia.

The sources declined to provide further details, but Reuters previously reported that Rome was willing to finance up to 40 percent of Intel’s total investment in Italy.

The state’s contribution to Intel’s investment program is something that must be shared with the next government before a possible deal is formalized, one of the sources said, adding that Draghi could let the next government make the announcement.

To boost domestic chip production, Rome is also in talks with Franco-Italian STMicroelectronics, Taiwanese chipmakers MEMC Electronic Materials Inc and TSMC and Israel’s Tower Semiconductor, which Intel bought earlier this year.

© Thomson Reuters 2022


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