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HomeUK NewsIntel will not consider UK microchip factory after Brexit, says CEO

Intel will not consider UK microchip factory after Brexit, says CEO

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

the  CEO of Intel, Pat Gelsinger, has told the BBC that the country “would have been a site that we would have considered”.

But he continued by saying that: “Post-Brexit… we’re looking at EU countries and getting support from the EU”.

Intel wants to boost its output amid the global chip shortage that has hit the supply of cars, as well as many other goods.

The company, which is one of the world’s largest makers of semiconductors, has said that the crisis has shown the US and Europe are both too reliant on Asia for its chip-making needs.

This comes after the Prime Minister has denied the UK is in crisis as both labour shortages and supply issues continue to affect the nation. Amidst the shortages, the PM said that the economy was facing the “stresses and strains that you’d expect from a giant waking up” after the COVID-19.

Intel is said to be investing up to $95bn (£70bn) on opening and upgrading semiconductor plants within Europe over the next decade, as well as boosting its US output.

But while Mr Gelsinger has said that the firm “absolutely would have been seeking sites for consideration” within the UK, he said Brexit had changed this possibility.

“I have no idea whether we would have had a superior site from the UK,” he said. “But we now have about 70 proposals for sites across Europe from maybe 10 different countries.

“We’re hopeful that we’ll get to agreement on a site, as well as support from the EU… before the end of this year.”

Microchips are a vital component within millions of products from cars to washing machines, but they have been in short supply during this year as a result of surging demand, as well as supply chain issues.

It has led to many shortages of popular goods such cars and computers and has driven up prices, issues that Mr Gelsinger said were set to continue into the Christmas period.

“There is some possibility that there may be a few IOUs under the Christmas trees around the world this year,” he said.

“Just everything is short right now. And even as I and my peers in the industry are working like crazy to catch up, it’s going to be a while.”

He said things would “incrementally” improve next year but were unlikely to stabilise until 2023.

Intel’s expansion has come as the overall market for semi-conductors is set to more than double within the next seven years to around $800bn.

The firm also hopes to secure subsidies from US and European politicians, who feel their reliance on Asia for chips could threaten national security.

This comes after the gap between electricity supply and demand is expected to be narrower this winter than last as the country battles an energy crunch but there should be no disruption from the lights or gas flames going out, according to key industry reports.

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

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

Intel will continue outsourcing some of its chip-making but eventually hopes to make most of its products in-house. Competing won’t be easy, though.

Chip-making is still far cheaper in Asia and Intel’s rivals continue to expand. TSMC, the world’s largest contract maker of semi-conductors, will spend $100bn on increasing capacity over the next three years while Samsung invests $205bn.

Mr Gelsinger said he is confident Intel can still regain its leading edge. “This is an industry that we created in the US, Intel’s the company that puts silicon into Silicon Valley,” he said.

“But we realise these are good companies, they’re well capitalised, they’re investing, they’re innovating together. So we have to re-earn that right of unquestioned leadership.”

Eve Cooper
Eve Cooper
I've been writing articles and stories for as long as I can remember and in the past few years I've had the fortune of turning that love & passion for writing into my job :)

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