Exclusive – Italy and Intel choose Veneto as preferred region for new chip factory

Exclusive – Italy and Intel choose Veneto as preferred region for new chip factory

By Giulio Piovaccari and Giuseppe Fonte

ROME (Reuters) – The outgoing government of Mario Draghi and Intel Corp (Nasdaq) have chosen the town of Vegacio in the northeastern Veneto region as their preferred location for a new multibillion-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 chip maker last March to invest up to 80 billion euros ($77.5 billion) over the next decade in building capacity across Europe.

The initial investment is expected to rise by around €4.5 billion over time, and Intel said the Italian plant will create 1,500 jobs as well as an additional 3,500 across suppliers and partners, with operations starting between 2025 and 2027.

The Italian plant will be an advanced semiconductor packaging and assembly plant, using new technologies to weave whole wafers together from tiles.

The sources, who asked not to be named due to the sensitivity of the matter, said the parties had worked out the details of a comprehensive agreement in early September, but that the results of the general election would not be announced on Sunday.

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

Located near Verona, on the strategic Brenner Highway and Rail, Vigasio is a preferred choice from a shortlist of two locations that also includes one in the Northwest Piedmont region.

One source added that the site is well connected to Germany, particularly the city of Magdeburg, where Intel will build two factories, among other reasons.

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

Draghi’s close aides aim to engage in behind-the-scenes negotiations with their potential successors to avoid any risks to the agreement from the new Italian government, the people said, adding that the choice of location is very politically sensitive.

All opinion polls expected the Italian Brotherhood led by Georgia Meloni to emerge as the leading party on Sunday and share power with its allies, the League, headed by Matteo Salvini, and Forza Italia led by Silvio Berlusconi.

The sources declined to give further details, but Reuters previously reported that Rome is ready to finance up to 40% of Intel’s total investment in Italy.

One of the sources said the state’s contribution to Intel’s investment program is something that must necessarily be shared with the next government before any deal is eventually formalized, adding that Draghi may allow the next government to announce.

To boost the domestic chip industry, Rome is also in talks with French-Italian STMicroelectronics, Taiwanese chip maker MEMC Electronic Materials Inc and TSMC, and Israel. semiconductor tower (NASDAQ :), which was bought by Intel earlier this year.

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