Intel new backend plant in Poland may bring orders for IFS

Amanda Liang, Taipei Willis Ke, DIGITIMES Asia 0

Intel's planned new assembly and testing plant in Poland may help take orders from external customers for Intel Foundry Services (IFS), particularly for advanced packaging and testing operations, after it becomes operational as scheduled in 2027, according to industry observers.

Intel has just disclosed plans to set up the new facility in Wroclaw in the Lower Silesia region of Poland at a total cost of US$4.6 billion, which has been described by Poland's prime minister Mateusz Morawiecki as the "largest greenfield investment in the history of Poland."

Reports from the World Street Journal and EURACTIV indicated that Poland is set to become the newest member in the campaign by European Union leaders to strengthen Europe's semiconductor supply chain. The European and US governments are attempting to encourage semiconductor companies to set up new plants on both sides of the Atlantic with subsidies and other investment incentives, aiming to wean themselves off Asian production capacity.

Intel already operates a wafer fabrication fab in Ireland and plans to build another base in Magdeburg, Germany. The company said that combining production lines in Germany, Poland and Ireland will boost the flexibility and cost efficiency of the European semiconductor supply chain.

Intel's global operating officer (GOO) Keywan Esfarjani has stated that in his view, the Poland project aligns with Intel's global strategy of bringing production facilities closer to end customers and building a more reliable flexibility supply chain.

Esfarjani pointed out that the planned backend facility in Poland is approximately 500 kilometers away from two major wafer fabs in Magdeburg, Germany, which will provide semi-finished wafers for the Polish plant. Additionally, the packaging and testing facility is also about 500 kilometers away from Intel's research center in Gdansk, the largest city in northern Poland, where Intel employs 4,000 staff members.

When asked about the amount of government subsidies that Intel will receive from Poland for its new plant there, Esfarjani said the nature of the project does not involve direct subsidies, and therefore it is difficult to quantify the government subsidies.

He stressed to media outlets that the new plant will be the only Intel semiconductor assembly and testing facility in Europe.

But industry observers noted that Esfarjani's statement simply highlights the significance of the new facility in Poland as a strategic move to strengthen Intel's presence in Europe, and does not necessarily imply that the previous negotiations for investing in a packaging and testing plant in Italy have been abandoned. They added that the status of any previous or ongoing negotiations for investments in other locations would need to be confirmed separately.