(Reuters) - Germany's southern state of Bavaria is in talks with Intel (NASDAQ:INTC) to build a European chip factory in a bid to counter supply bottlenecks that have hampered production in the automotive sector, the local economy minister said on Friday.
In recent months, the U.S. chipmaker has been seeking 8 billion euros ($9.5 billion) in public subsidies to build a semiconductor manufacturing site in Europe.
"I strongly support this," said Economy Minister Hubert Aiwanger, whose state is home to luxury carmaker BMW. "The possible location of a large international semiconductor manufacturer in Bavaria is an outstanding opportunity."
Bavaria has suggested a disused air base in Penzing-Landsberg, west of Munich as a possible location for the factory, Aiwanger said.
A shortage of semiconductors is causing headwinds for Europe's car manufacturers and threatens to de-rail Germany's economic recovery from the coronavirus pandemic.
The European Union is considering creating a semiconductor alliance including STMicroelectronics, NXP (NASDAQ:NXPI), Infineon (OTC:IFNNY) and ASML to cut dependence on foreign chipmakers during a global supply chain crunch.
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