Intel to open semiconductor assembly and testing facility in Poland

What we know

Last month, global chip manufacturer Intel announced plans to open a new $4.6 billion semiconductor assembly and testing facility in Wrocław, Poland.

This follows recent multi-billion dollar investments in similar assembly, testing and R&D facilities in France, Germany, Ireland, Poland and Spain, as the company takes major steps towards creating an entirely European end-to-end semiconductor supply chain.

Exacerbated by the global pandemic, China-U.S trade war and ongoing war in Ukraine, chip manufacturers have started to take steps to rebalance their global manufacturing network as they look to move away from a reliance on Asia-Pacific chip production.

Why it matters

Since the pandemic a global shortage in semiconductor chips has had a crippling impact on global supply chains and those industries most reliant on chip technology - such as consumer electronics. At its peak, lead times on product manufacturing was on average four to eight weeks longer than normal.

By strengthening its European manufacturing supply chain, Intel has benefitted from easing funding rules and subsidies as part of the European Union’s goal of developing a more resilient semiconductor supply chain.

Chip shortages are expected to remain through 2023 and into 2024, and, despite efforts to diversify supply chains and nearshore to critical local markets, it may be some time before chip manufacturers - as well as companies and consumers that are dependent on their production - will begin to see any sort of return.