Intel not considering UK chip factory after Brexit

Pat Gelsinger became general manager of Intel in February

The Intel boss said the US chipmaker is no longer considering building a factory in the UK because of Brexit.

Pat Gelsinger told the BBC that before the UK left the EU the country “would have been a site we would have considered”.

But he added: “After Brexit … we look at EU countries and get EU support.”

Intel wants to increase production amid a global chip shortage that has affected the supply of cars and other goods.

The company – which is one of the world’s largest semiconductor manufacturers – says the crisis has shown the United States and Europe to be too dependent on Asia for their chip-making needs.

Intel is investing up to $ 95 billion (£ 70 billion) in opening and upgrading semiconductor factories in Europe over the next 10 years, as well as increasing its production in the States -United.

But while Mr Gelsinger said the company ‘would have absolutely searched for sites to consider’ in the UK, he said Brexit had changed that.

“I have no idea if we would have had a top UK site,” he said. “But now we have around 70 submissions for sites across Europe from maybe 10 different countries.

“We hope to reach an agreement on a site, as well as support from the EU … before the end of this year.”

Microchips are essential components of millions of products, from cars to washing machines, but they have been in short supply this year due to growing demand and supply chain issues.

This has led to shortages of popular products like cars and computers and pushed up prices – problems, according to Mr. Gelsinger, are expected to continue until Christmas.

“There may be some IOUs under Christmas trees around the world this year,” he said.

“Everything is short right now. And while I and my industry peers are working like crazy to catch up, it’s going to take a while.”

He said things would “gradually” improve over the next year but were unlikely to stabilize until 2023.

“No one should be too dependent”

Intel’s expansion comes as the global semiconductor market is expected to more than double over the next seven years to around $ 800 billion.

The company is also hoping to secure grants from US and European politicians, who believe their reliance on Asia for chips could threaten national security.

Today, the United States produces only about 12% of the world’s semiconductors, while Koreans Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) account for 70% of the global supply.

“It is clearly part of the motivation for a globally balanced supply chain that no one should be too dependent on someone else,” Mr Gelsinger told the BBC.

Intel will continue to outsource some of its chip manufacturing, but ultimately hopes to get the most out of its products in-house. The competition will not be easy, however.

Chip making is still much cheaper in Asia, and Intel’s competitors continue to grow. TSMC, the world’s largest semiconductor subcontractor, will spend $ 100 billion to increase capacity over the next three years, while Samsung will invest $ 205 billion.

Mr Gelsinger said he was confident Intel could still regain its lead. “It’s an industry that we created in the United States, the Intel company that puts silicon in Silicon Valley,” he said.

“But we realize that these are good companies, they are well capitalized, they invest, they innovate together. So we have to reclaim this right of unchallenged leadership.”

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