Giuseppe Fonte, Giulio Picovaccari

ROME (Reuters: Intel) and Italy intensify talks about investments worth approximately 8 billion Euros ($9 billion) for the construction of an advanced semiconductor packaging facility, according to two people familiar with the matter.

This deal would guarantee Italy approximately 10% of the US company’s 80 billion euro investment in Europe over the next decade on cutting-edge production capacity. It will help prevent future shortages.

Sources previously confirmed to Reuters that investment was between 4 and 8 billion euros.

Germany is the largest European economy and will be the first to acquire Intel’s European megafab plant. However, France continues to be in contention, Reuters reported.

Intel refused to make any comment Thursday regarding the discussions or the potential size of the investment. The company also said that no changes have been made to its plans.

The explosive demand for consumer electronics, such as smartphones or computers, resulting from work-from home trends during the COVID-19 epidemic led to chipmakers scrambling in order to improve their production.

After recent supply chain issues, many EU countries that rely heavily on the manufacturing of automobiles are keen to decrease their dependency on US semiconductor suppliers.

Italian factories would use innovative technology to create full chips in the proposed Italian plant.

Sources said that Intel and Prime Minister Mario Draghi’s Italian government are talking about a $9 billion investment over 10 years starting with construction.

They said that negotiations are complicated and Rome wanted Intel to explain its plans for Italy, before formalizing a package with favourable conditions on employment costs and jobs.

The sources claimed that once Rome and Intel have reached an agreement, they will choose a place for the plant.

Its CEO Pat Gelsinger, however, stated that the company hoped to unveil the exact locations of its new chip plants in Europe and America early next year.

In April the Italian government used anti takeover legislation to stop a sale of its controlling interest in an Italian semiconductor equipment producer to China’s Shenzhen Invenland Holdings Co. Ltd.

($1 = 0.8823 euros)