Investing.com – Intel stock (NASDAQ:INTC) rose 0.5% after the company revealed plans to invest up to 80 billion euro ($94.77 billion) to boost its chip manufacturing capacity in Europe.
The company will announce the locations of two major new European chip fabrication plants by the end of the year, Intel CEO Pat Gelsinger said, speaking at Munich’s IAA (NYSE:IAA) auto show.
Possible production sites include Germany, France and Poland, where the chip giant has a presence. It also plans to establish committed foundry capacity at its fab in Ireland.
The company will also launch the Intel Foundry Services Accelerator to help automotive chip designers transition to advanced nodes.
Intel is currently building two chip manufacturing plants at Arizona in U.S., targeting $20 billion on the project.
The company is betting big time on demand from automakers to supply chips from the proposed plants in Europe.
Gelsinger predicts the “digitization of everything” will push the share of semiconductors in the total cost of a vehicle to 20% by 2030 – up five-fold from 4% in 2019.
The total addressable market for automotive silicon will more than double by the end of the decade to $115 billion – approximately 11% of the entire silicon market, according to estimates given by Intel.
The company’s manufacturing plans haven’t come a day soon as chipmakers struggle to meet burgeoning demand from automakers and makers of digital devices like mobiles, laptops and printers.
Work-from-home need for digital devices and rising demand from vehicle makers as automobiles get embedded with more technology has led to an unprecedented shortage of supplies and a surge in product prices.