Intel is facing political pressure and stress across its business, with its 2022 plans to manufacture in the EU one of the casualties
Intel is facing political pressure and stress across its business, with its 2022 plans to manufacture in the EU one of the casualties
Intel has found itself on the defensive following a social media post from US president Donald Trump, who last week called for the company’s CEO to resign.
The chipmaker has been struggling and announced in July that it would be slowing down expansion of one of its US sites in Ohio due to lower forecasted demand. It has also stopped plans to build a major facility in Germany, with a site in Poland also dropped, which is a major blow to the European Union (EU).
Neither the US scale-back or the decision to drop its planned European expansion are good news. The rhetoric and tariff policies from the White House suggest the US government will exert force on chipmakers to set up major manufacturing in the US or face tariffs, which would see the cost of semiconductor components used in US manufacturing double in price.EU chip plans scuppered
The EU previously portrayed the chipmaker’s plans to build out manufacturing in the region as a major win, helping to pave the way to a secure EU semiconductor supply chain and enable Europe to achieve 20% market share in the semiconductor sector by 2030.
But Intel’s plans to expand are being curbed by the reality that its business is not growing fast enough to justify the immense expense needed. The company recently announced job cuts in its foundry business, which makes chips for other companies.
“The layoffs impacting foundries around the world could reflect more than just cost-cutting – for example, it could be down to taking a more strategic focus on specific fabric technology and capacity,” Forrester senior analyst, Alvin Nguyen, noted.
