When Pat Gelsinger rejoined Intel in 2021 and proclaimed the IDM 2.0 model, he mentioned that the company would incur losses in the short term but prosper in the long term. However, because of huge investments in its U.S. production capacity and ramping up products made on the latest nodes, the company's profit margins are thin—apparently too thin, as Politico reports Intel is halting some of its European projects in favor of others.
Intel has paused several significant investment projects in Europe due to 'financial losses,' Politico reports. This changed policy affects planned projects in France and Italy, redirecting Intel's focus to its efforts in Ireland, where it has a leading edge fab; Germany, where it is about to start constructing one of the most advanced fabs in the world; and Poland, where Intel is set to build an advanced packaging facility. However, Intel's plans in other European countries are no less ambitious.
In France, Intel had planned to establish a new research and development hub for AI and HPC near Paris. This project, set to open by the end of the year with 450 employees, is now on hold due to changing economic and market conditions. Despite the pause, Intel maintains that France remains a future candidate for the R&D hub.
Italy faces a similar situation. Intel's proposed €4.5 billion manufacturing plant has been shelved. This facility would have created 1,500 jobs at Intel and 3,500 for suppliers. Intel's expansion in Italy was further hampered by the collapse of its deal to acquire Tower Semiconductor, an Israeli company with connections to Italy's STMicroelectronics. This acquisition fell through due to the lack of approval from Chinese authorities, which impacted Intel's plans to strengthen its presence in Italy.
But while some of Intel's projects might have been postponed, Germany and Poland are proceeding, but not without hiccups. In Germany, Intel is constructing a massive factory complex with investments for the first phase amounting to €30 billion. Still, Politico says various delays have pushed the production start date to late 2028. In Poland, Intel is planning a €4.6 billion advanced chip packaging plant in Wroclaw, which will work in combination with the German facility: the latter is set to make chiplets, and the former will package them.
