Why Intel won't be building a chip factory in the UK

8 October 2021

The Intel boss has said the company will be investing in European and US factories to ensure “globally balanced supply chains”.

Pat Gelsinger, chief executive of Intel, announced the company is to invest $95bn in opening and upgrading semiconductor plants in Europe to reduce global dependency on Asia, after global supply chains were rocked by shortages.

He said the company also intends to increase US chip production.

Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) produce 80% of global supplies alone, while the US is responsible for around 12% of production. 

Gelsinger told the BBC: "It is clearly part of the motivation of a globally balanced supply chain that nobody should be too dependent on somebody else.

"This is an industry that we created in the US, Intel's the company that puts silicon into Silicon Valley.” 

He said the company had received around 70 proposals for sites across Europe spanning 10 different countries. 

However, he said while the UK "would have been a site that we would have considered" pre-Brexit, the company is now “looking at EU countries and getting support from the EU". 

Gelsinger told the BBC the UK "would have been a site that we would have considered" pre-Brexit, but the company is now “looking at EU countries and getting support from the EU".  "would have been a site that we would have considered" pre-Brexit, but the company is now “looking at EU countries and getting support from the EU". 

He said: "We're hopeful that we'll get to an agreement on a site, as well as support from the EU... before the end of this year."

The EU announced plans to introduce a European Chip Act to double the amount of semiconductors the continent makes by 2030. 

EC president Ursula von der Leyen said increasing Europe’s production of chips – which currently stands below 10% of global production – would help establish “tech sovereignty” throughout the EU. 

Gelsinger’s comments come as the chip shortage, blamed on increased demand for electrical goods throughout Covid, has drastically reduced production at car and tech companies across the world. 

Semiconductors are integral for forming the circuit boards of cars and tech items including computers and games consoles. The average car contains around 1,500 chips. 

General Motors announced it was forced to close half of its North American car plants after a shortage of chips halted production, and US car production fell 72% year-on-year in the half of the year until August 2021. 

Gelsinger said: “Everything is short right now. And even as I and my peers in the industry are working like crazy to catch up.

"There is some possibility that there may be a few IOUs under the Christmas trees around the world this year."

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