By Douglas Busvine
BRUSSELS/BERLIN (Reuters) - Intel (NASDAQ:INTC) wants 8 billion euros ($9.7 billion) in public subsidies towards building a semiconductor factory in Europe, its CEO was quoted as saying on Friday, as the region seeks to reduce its reliance on imports amid a shortage of supplies.
The pitch is the first time Pat Gelsinger has publicly put a figure on how much state aid he would want, as Intel pursues a multibillion-dollar drive to take on Asian rivals in contract manufacturing.
"What we’re asking from both the U.S. and the European governments is to make it competitive for us to do it here compared to in Asia," Gelsinger told Politico Europe in an interview.
A spokesman for Intel confirmed the interview took place on Friday in Brussels, where Gelsinger was due to meet European Commissioner Thierry Breton for talks on semiconductor strategy.
Gelsinger, on his first European tour since taking charge, announced a new strategy last month for Intel to invest $20 billion in chip production in the United States.
On top of that, Gelsinger is prospecting for a location for a plant in Europe that he says would back Breton's goal of doubling the region's share of global chip output to 20% over the next decade.
Breton also held talks on Friday with Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's No.1 chip maker ahead of Korea's Samsung (KS:005930) and Intel.
"To meet current & future semiconductor industry demand, Europe will drastically increase production capacity - both on its own and through selected partnerships to ensure security of supply," Breton tweeted after the talks.
Recent disruption to semiconductor supply chains has added urgency to efforts to reduce import dependency, yet analysts caution Europe's shrunken technology base means it doesn't offer a viable market for a leading-edge plant, or 'fab'.
Industry and diplomatic sources say that, of the Big Three chipmakers, Intel is the only one so far to express concrete interest in Breton's goal of producing the most advanced chips in Europe.
Breton's drive to attract a major foreign chipmaker has unnerved home-grown players, and he is also discussing the creation of a European semiconductor alliance that would bundle their interests.
Germany's Infineon (OTC:IFNNY) said on Friday it welcomed Breton's initiative to strengthen chip production in Europe.
"As financial resources are naturally limited it is important to discuss most urgent needs and the most reasonable ways of investment,” Infineon said.
GERMAN VISIT
Gelsinger, who met German Economy Minister Peter Altmaier on Thursday, was quoted as saying Germany would be a suitable location for a potential European foundry.
"Geopolitically, if you’re in Europe, you want to be in continental Europe," he told Politico.
"We think of Germany as a good candidate - not the only, but a good candidate - for where we might build our fabrication capabilities," he said, also indicating interest in the Benelux countries.
On the German leg of his visit, Gelsinger also met executives from carmaker BMW and telecoms operator Deutsche Telekom (OTC:DTEGY), Intel said.
Sources said he also visited the headquarters of Volkswagen (DE:VOWG_p), although an Intel spokesman said he could not confirm that a meeting took place.
Separately, Volkswagen CEO Herbert Diess was quoted on Friday as saying the carmaker planned to design and develop its own high-powered chips for autonomous vehicles. [L8N2MN4YR]
Gelsinger travels on next week to Israel, where Intel is due to announce a $200 million investment in a new chip development campus and the hiring of 1,000 staff.
