Italy plans $4.5 bln fund to boost chipmaking

Italy plans to set aside more than 4 billion euros ($4.5 billion) until 2030 to boost domestic chip manufacturing and support innovative technologies, a draft decree seen by Reuters showed on Tuesday.

The move comes as the government tries to convince Intel to spend billions of euros on an advanced chipmaking plant in Italy that uses innovative technologies to weave full chips.

Rome is ready to offer Intel public money and other favourable terms to fund part of the overall investment, which is expected to be worth around 8 billion euros ($9 billion) over 10 years, Reuters reported in December.

To boost domestic chipmaking, Italy is also in talks with French-Italian STMicroelectronics , Taiwanese-controlled MEMC Electronic Materials Inc and Israeli Tower Semiconductor (TSEM.TA), which is set to be bought by Intel.

As part of a broader decree to support the economy and curb surging energy bills, the government plans to allocate 150 million euros in 2022 and 500 million euros per year from 2023 until 2030, the decree showed.

The government will promote “research and development of microprocessor technology and investments in new industrial applications of innovative technologies,” the decree showed.

Rome will also use the funding to convert existing industrial sites and favour the construction of new plants in Italy, the legislation added.

Chipmakers are scrambling to boost output after explosive demand for consumer electronics such as smartphones and computers resulting from the work-from-home trend during the COVID-19 pandemic led.

Meanwhile, EU countries, where many jobs still rely on industries such as automobile manufacturing, are eager to reduce their dependence on semiconductor supplies from China and the United States after recent supply chain problems.