Intel won't build a chip fab in the UK because of Brexit

nanoguy

Posts: 1,018   +14
Staff member
In brief: Intel has big plans for the future, but they don't involve a chip plant in the UK. Post-Brexit, the company no longer considers the country a good location for its expansion under the IDM 2.0 strategy, so it is currently evaluating several proposals from 10 other European countries.

Last month, Intel broke ground on two advanced chip fabs in Arizona. These are key to the company's renewed IDM 2.0 strategy that will see the new Intel Foundry Services division take on contract manufacturing for other companies for the first time in history.

Intel is also looking to build another pair of chip manufacturing plants in Europe, but the company is still in talks with several officials in the region to determine the best location for the new fabs, as well as secure much-needed subsidies for the project.

During an interview with the BBC, CEO Pat Gelsinger said the company had been considering the UK as a potential location for a chip fab, but that is no longer an option due to Brexit. After the UK made its decision to leave the European Union, Intel has heard no less than 70 proposals for sites across 10 other countries in Europe, some of which looked more attractive to Intel in the present context.

Gelsinger says he's hopeful the company will be able to reach an agreement on the site for the two new fabs by the end of this year. Discussions with EU officials are also progressing well, and Intel is hoping to tap into the bloc's Recovery and Resilience Fund for subsidies. As for Intel, it plans to invest as much as $95 billion into the ambitious project.

Also read: ASML's next-gen EUV machine will give Moore's Law a new lease of life

In the meantime, the industry as a whole will have to contend with a shortage of chips that has automakers scrambling to secure contracts for mature process nodes. As of writing, more than 85 percent of the world's semiconductor manufacturing capacity is concentrated in a handful of Asian countries, while the US and Europe account for 12 percent and 2.8 percent, respectively.

Gelsinger is one of the proponents of a "globally balanced supply chain," but building chip factories is a multi-year effort that costs between $10 billion and $20 billion per facility. Even though TSMC, Samsung, and GlobalFoundries are also pouring billions into their own expansion plans, all of it will take years to come to fruition.

As for the ongoing chip shortage, Gelsinger believes the situation won't fully stabilize until 2023.

Permalink to story.

 

BadThad

Posts: 729   +812
"so it is currently evaluating several proposals from 10 other European countries."

They may give you some tax breaks and such but they will certainly make it back in HUGE fines. The EU is a pro at money stealing. I 100% guarantee within 10 years we will hear about the giant fines on Intel for whatever the EU bureaucrats can dream up!
 

Irata

Posts: 1,805   +3,033
But the company is still in talks with several officials in the region to determine the best location for the new fabs, as well as secure much-needed subsidies for the project.

So…counting on bigger subsidies from the EU ?
 

Irata

Posts: 1,805   +3,033
"so it is currently evaluating several proposals from 10 other European countries."

They may give you some tax breaks and such but they will certainly make it back in HUGE fines. The EU is a pro at money stealing. I 100% guarantee within 10 years we will hear about the giant fines on Intel for whatever the EU bureaucrats can dream up!
I think Volkswagen and many other non US companies disagree…

Intel hasn‘t paid their EU fines yet, btw.
 

Revolution 11

Posts: 89   +100
It's probably a bit Brexit but largely these kinds of investments are made because of government tax breaks. As the article points out they want the EU funding and subsidies. So yeah Brexit, but also no.
I mean if I was the government of Germany and I could pay $10 billion to get $100 billion of hard assets invested in my country, that's a great investment strictly on the money aspects.

The national security benefits you get for secure and local production of a critical strategic resource is easily easily worth $10 billion.
 

RedBear

Posts: 26   +23
It's probably a bit Brexit but largely these kinds of investments are made because of government tax breaks. As the article points out they want the EU funding and subsidies. So yeah Brexit, but also no.
Not being able to offer substantial enough incentives is still a consequence of Brexit, the main argument against leaving the EU has always been that no European country, probably not even Germany, could thrive on its own in a world dominated by giants like the United States and China (and eventually India and maybe some others). In the long term, after they will figure out how to get enough truck drivers to supply their gasoline stations, that will be the main disadvantage of Brexit.
 

Austinturner

Posts: 307   +367
"so it is currently evaluating several proposals from 10 other European countries."

They may give you some tax breaks and such but they will certainly make it back in HUGE fines. The EU is a pro at money stealing. I 100% guarantee within 10 years we will hear about the giant fines on Intel for whatever the EU bureaucrats can dream up!
Or they could just choose not break the law so they don’t get fined.
 

defaultluser

Posts: 275   +238
So…counting on bigger subsidies from the EU ?


Hey man, it's what already got MS and Intel into Ireland!

The freedom of transit means you can bleed talent from other nations without any of that "Naturalization" mess.

https://aer.eu/brain-drain/

I think I'd take Brexit, over trying to compete with the "How low can you go to please these corps?" Perpetual Brain Drain!
 

Vulcanproject

Posts: 1,435   +2,567
Not being able to offer substantial enough incentives is still a consequence of Brexit, the main argument against leaving the EU has always been that no European country, probably not even Germany, could thrive on its own in a world dominated by giants like the United States and China (and eventually India and maybe some others). In the long term, after they will figure out how to get enough truck drivers to supply their gasoline stations, that will be the main disadvantage of Brexit.

I think frequently blaming Brexit is seeing the boogeyman everywhere. To say that the direct reason why the UK will not get Factory A or industrial plant X is because of Brexit is a too certain an assertion for me. Lack of subsidies yes, but EU money hasn't been conjured from thin air and the British aren't flat broke just yet.

Brexit absolutely has negative consequences. We are seeing some of them, supply chain issues and human resource issues. Are they inevitable and long term? Or just oversights and shorter term? I think most are short term as the result of a bitter divorce. The truck driver thing is stupid, but yanking the alarm is also dumb. You train and you fix it with indigenous workers. It's not insurmountable. In 5 years to me it seems lots of these issues will just be comical historical footnotes. As essentially the second largest economy in the EU they undoubtedly put more in than most, and evidently felt like they got less in return. It's probably true to an extent. The garden has roses and they also have thorns.

This is not a statement that seeks to say Brexit was a net positive, I don't personally think it is. But neither do I think the UK cannot prosper and survive outside the EU. Plenty of countries skirting the bloc are living their best lives, particularly in Scandinavia. I'm also not fooled to think it was solely beneficial. Did major industry flock to the UK when they somehow didn't before they joined the EU? Not really. Not at all in fact.

In short it is going to be difficult to define where the negative effect of Brexit actually begins. It's all too easy to claim this or that is a permanent direct result of it when it probably isn't and there is a lot more nuance to many decisions.
 
Last edited:

Mjswooosh

Posts: 65   +84
Demonizing Brexit is generally just brainless endorsement of terribly destructive, anti-labor Neoliberal globalization polices which have largely hollowed out the middle class in various countries over the past 4 decades, including the U.K. Most of the people commenting to the contrary are absolutely clueless, although a small percentage no doubt benefit from the destruction of other familys’ livelihoods. Intel is just one of many predatory companies partly dependent on the masses being ignorant or complicit. This is nothing new.

The effects of Brexit are complex, but the short version is short term pain, long term gain.
 

rmcrys

Posts: 78   +76
I think frequently blaming Brexit is seeing the boogeyman everywhere. ... The truck driver thing is stupid, but yanking the alarm is also dumb. You train and you fix it with indigenous workers. It's not insurmountable .. As essentially the second largest economy in the EU they undoubtedly put more in than most, and evidently felt like they got less in return. It's probably true to an extent.

Basically what the Brexit supporters want is to have the benefits from the EU without having to give anything in return. Many hundreds of thousands of "cheap" skilled works trained (very expensive training) on other countries (engineers, physicians, nurses, etc etc) "flew" to the UK, as well companies, many new young families which will repopulate the old UK, etc. But the negatives weren't accepted, just the positives. That is why it didn't work. The UK has much less factories and industry, the UK doesn't have enough young population, the UK doesn't have investment or universities to train fast skilled workers so let's see how it will work out...
 

Lounds

Posts: 951   +857
It's probably a bit Brexit but largely these kinds of investments are made because of government tax breaks. As the article points out they want the EU funding and subsidies. So yeah Brexit, but also no.
They might choose Ireland, like Apple does for tax reasons. Their corporation tax is something silly like 10%, although the UK attracts a lot of big business with custom tax deals. I'd say don't rule the UK out.
 

RedBear

Posts: 26   +23
I think frequently blaming Brexit is seeing the boogeyman everywhere. To say that the direct reason why the UK will not get Factory A or industrial plant X is because of Brexit is a too certain an assertion for me. Lack of subsidies yes, but EU money hasn't been conjured from thin air and the British aren't flat broke just yet.

Brexit absolutely has negative consequences. We are seeing some of them, supply chain issues and human resource issues. Are they inevitable and long term? Or just oversights and shorter term? I think most are short term as the result of a bitter divorce. The truck driver thing is stupid, but yanking the alarm is also dumb. You train and you fix it with indigenous workers. It's not insurmountable. In 5 years to me it seems lots of these issues will just be comical historical footnotes. As essentially the second largest economy in the EU they undoubtedly put more in than most, and evidently felt like they got less in return. It's probably true to an extent. The garden has roses and they also have thorns.

This is not a statement that seeks to say Brexit was a net positive, I don't personally think it is. But neither do I think the UK cannot prosper and survive outside the EU. Plenty of countries skirting the bloc are living their best lives, particularly in Scandinavia. I'm also not fooled to think it was solely beneficial. Did major industry flock to the UK when they somehow didn't before they joined the EU? Not really. Not at all in fact.

In short it is going to be difficult to define where the negative effect of Brexit actually begins. It's all too easy to claim this or that is a permanent direct result of it when it probably isn't and there is a lot more nuance to many decisions.
Of course they can survive outside the EU and obviously they will eventually solve the issues with drivers and workforce, I admitted as much in my post before, but surviving is not the same as thriving and in this specific case you have the word of the involved corporation (Intel) in saying that they're skipping the United Kingdom because of Brexit, I don't really understand how it's difficult to see where the negative effect of Brexit begins.
 

NumberSix

Posts: 77   +139
Of course those that voted for it wont see it that way, they seem to believe it is going great, the fish are happy and the sunlit uplands are coming, no one is ever stronger when they are stood all alone.
 

3volv3d

Posts: 415   +215
Demonizing Brexit is generally just brainless endorsement of terribly destructive, anti-labor Neoliberal globalization polices which have largely hollowed out the middle class in various countries over the past 4 decades, including the U.K. Most of the people commenting to the contrary are absolutely clueless, although a small percentage no doubt benefit from the destruction of other familys’ livelihoods. Intel is just one of many predatory companies partly dependent on the masses being ignorant or complicit. This is nothing new.

The effects of Brexit are complex, but the short version is short term pain, long term gain.

Covid has proven that the UK infrastructure is non existent. Britain has nothing to offer the world, the once great British companies all sold off to foreign entities.
It can't even support itself in a global crisis.
If you have news stories about immigration and refugee issues then offer Brexit a whole bunch of people vote to leave in the hope the government now control the fate of the UK.
Unfortunately for those shallow voters, the government have no such power, or options like, especially when they need to trade with others to survive.
I don't see how you can have long term gain anything, when the world's going into a short term climate melt down, seems to be doom and gloom stories all over.
You have the best rose tinted glasses ever.


 

Ultraman1966

Posts: 163   +64
I think frequently blaming Brexit is seeing the boogeyman everywhere. To say that the direct reason why the UK will not get Factory A or industrial plant X is because of Brexit is a too certain an assertion for me. Lack of subsidies yes, but EU money hasn't been conjured from thin air and the British aren't flat broke just yet.

Brexit absolutely has negative consequences. We are seeing some of them, supply chain issues and human resource issues. Are they inevitable and long term? Or just oversights and shorter term? I think most are short term as the result of a bitter divorce. The truck driver thing is stupid, but yanking the alarm is also dumb. You train and you fix it with indigenous workers. It's not insurmountable. In 5 years to me it seems lots of these issues will just be comical historical footnotes. As essentially the second largest economy in the EU they undoubtedly put more in than most, and evidently felt like they got less in return. It's probably true to an extent. The garden has roses and they also have thorns.

This is not a statement that seeks to say Brexit was a net positive, I don't personally think it is. But neither do I think the UK cannot prosper and survive outside the EU. Plenty of countries skirting the bloc are living their best lives, particularly in Scandinavia. I'm also not fooled to think it was solely beneficial. Did major industry flock to the UK when they somehow didn't before they joined the EU? Not really. Not at all in fact.

In short it is going to be difficult to define where the negative effect of Brexit actually begins. It's all too easy to claim this or that is a permanent direct result of it when it probably isn't and there is a lot more nuance to many decisions.
the Scandi countries that don't have EU membership are in the single market or customs union. They have to accept the 4 major pillars including free movement.
The UK has nothing, we have been cast adrift from our closet and biggest trading partner with a flimsy tariff free agreement. Of course we can survive but to prosper would take a long time given our deep integration. Part of the reason for the petrol crisis is that we operate on JIT for the stocks. Hard to do when there's a labour shortage and we've been reliant on that free movement of people.
The government did nothing to prepare the business except with platitude and uncertainties. But we reap what we sow for voting in this **** shower.