Intel is expected to sign a deal initially worth $5 billion with Italy to build an advanced semiconductor packaging and assembly plant, Reuters news report said.
Intel’s investment in Italy is part of a wider plan announced by the U.S. chipmaker earlier this year to invest $88 billion in building capacity across Europe.
The government of outgoing Prime Minister Mario Draghi is working to prepare an agreement by the end of August, ahead of a snap national election scheduled on Sept. 25.
Italy is aiming to fund as much as 40 percent of Intel’s total investment in Italy, which is expected to rise over time from the initial $5 billion.
Intel and the government have shortlisted possible sites in two Italian regions. Sites for chipset units are located in the northern regions of Piedmont and Veneto.
The European Commission this year said it had made available 15 billion euros in additional public and private investment by 2030 under the Chips Act aimed at funding innovative semiconductor facilities. This is on top of 30 billion euros of public investments already planned from NextGenerationEU, Horizon Europe and national budgets.
Italy has set aside 4.15 billion euros until 2030 to attract chipmakers and invest in industrial applications of innovative technologies.
Italy is also in talks with French-Italian STMicroelectronics , Taiwan chipmakers MEMC Electronic Materials and TSMC, and Israeli Tower Semiconductor, which Intel bought earlier this year.
STMicroelectronics last month signed an agreement with GlobalFoundries to build a $5.7 billion chip factory in France.