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Intel and Italy are said to be nearing a $5 billion deal for a chip factory: Details Two sources familiar with the negotiations told Reuters on Thursday that Italy is close to finalizing a contract with Intel for the construction of a sophisticated semiconductor packaging and assembly facility in the nation for an initial $5 billion (approximately Rs. 39,600 crores).

The US chipmaker Intel’s investment in Italy is a part of a larger strategy that the company unveiled earlier this year to invest $88 billion (roughly Rs. 6,97,500 crore) in expanding capacity throughout Europe. Intel is attempting to reduce its reliance on Asian chip imports and ease a supply shortage that has slowed production in the region’s crucial car sector. Follow For More Updates at Worldrapiddnews.com

The sources, who requested anonymity owing to the delicate nature of the situation, claimed that the administration of outgoing Prime Minister Mario Draghi was seeking to reach a deal by the end of August in order to hold a special election on September 25.

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As much as 40% of Intel‘s entire investment in Italy, which is anticipated to increase over time from the initial $5 (approximately Rs. 39,600 crores) billion, is ready to be funded, according to sources who spoke to Reuters earlier. Both Intel and Draghi’s office declined to comment.

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The factory would weave entire chips made of tiles together using innovative technology. According to the sources, Intel and the government have identified two potential locations in Italy, with one of them stating that they are in the northern regions of Piedmont and Veneto.

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According to both sources, a final choice has not yet been made on the location of the facility. Initially, the areas of Sicily, Lombardy, and Apulia were also taken into consideration. It’s not yet known how much Intel will contribute overall or how Italy would pay for its portion of the investment.

Early this year, the European Commission declared that it has made available 15 billion euros in new public and private investment by 2030 under the so-called CHIPS Act, which aims to finance innovative semiconductor facilities. This comes on top of the 30 billion euros in public investments that NextGenerationEU, Horizon Europe, and national budgets have previously planned. Rome has so far allocated EUR 4.15 billion (about Rs 33,539 crore) until 2030 in order to entice chipmakers and invest in fresh industrial uses for cutting-edge technologies.

The government is also in contact with Israeli Tower Semiconductor, which Intel just acquired, French-Italian STMicroelectronics, Taiwan chipmakers MEMC Electronic Materials and TSMC, and Taiwan-based STMicroelectronics. Last month, STMicroelectronics and GlobalFoundries agreed to the construction of a chip facility in France valued at $5.7 billion (approximately Rs. 45,200 crore).

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