Intel is close to signing an initial $5bn deal with Italy to construct an advanced semiconductor packaging and assembly plant in the country, Reuters reported, citing two sources familiar with the discussions.

The US chipmaker’s investment in Italy is part of its plan announced earlier this year to invest $88bn in boosting capacity across Europe.

Europe is aiming to cut down its dependence on Asian chip imports and boost supply as the output crunch as impacting Europe’s car sector.

The sources added that the government of outgoing Prime Minister Mario Draghi was working to have a deal by the end of this month, ahead of a snap national election slated on 25 September.

Sources earlier told the news outlet that Italy is prepared to fund as much as 40% of Intel‘s total investment in the country, which is expected to increase over time from the initial $5bn.

The factory would deploy new technologies to bring together full chips out of tiles.

Intel and the Italian government have shortlisted potential sites in two regions, the sources said.

One of the sourced added that the sites are located in the northern regions of Piedmont and Veneto.

A final decision on where to build the facility is yet to be taken.

Initially, the Lombardy, Apulia and Sicily regions were also considered.

It is not clear what the total size of the US company’s investment would and how Italy plans to fund its share in the plant.
Image: A final decision on where to build the facility is yet to be taken. Credit: Marcin from Pixabay.