Singapore-based Silicon Box to invest US$3.5 billion in new chip plant in Italy

Semiconductors startup Silicon Box will invest US$3.5 billion in Italy to build a chip factory in the north of the country, Industry Minister Adolfo Urso said on Monday (Mar 11).

“Recent global upheavals highlight the need to build a more resilient supply chain for semiconductors in Europe,” Urso told reporters. The chiplet production plant is expected to generate 1,600 jobs at full capacity.

Urso added the project had around 4 billion euros (S$5.82 billion) in expected operational costs spread over 15 years.

It remains to be seen where exactly in the north of Italy the plant will be based, as there are several sites across that area up for grabs.

The announcement involving Singapore-based Silicon Box came after the government failed to persuade US-based chip-maker giant Intel Corp, which has a market capitalisation of about US$186 billion, to invest in Italy.

Silicon Box closed a US$200 million financing round in January, bringing its valuation to more than US$1 billion. The government did not immediately clarify where the funding will come from.

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More broadly, Europe and the US are increasingly seeking to bolster national output of chips to reduce the reliance on Asian facilities and to avert the risk of supply shortages build a factory in the country.

Intel shelved a project for an investment in a European back-end manufacturing factory.

It chose Poland for a test and assembly site worth US$4.6 billion. The company is expected to invest 30 billion euros in a new chip factory in the German city of Magdeburg, supported by 10 billion euros in subsidies from Berlin.

Strategic investors into Silicon Box include Hillhouse Capital, the corporate venture arm of Lam Research, and Tata Electronics.

Silicon Box focuses on chiplet technology, which combines multiple smaller chips within a single package. Chiplets have been increasingly adopted by companies such as Apple and chipmaker AMD for their greater flexibility, performance, as well as efficiency.

Traditional chip designs are made up of transistors linked together by electronic circuits on a single chip. Silicon Box’s approach allows companies to put their own chips together with more existing integrated circuits as if they were Lego blocks.

The company said this addresses a key bottleneck in chip production. Last July, it launched a US$2 billion 750,000 square-foot facility in Tampines, which has been in mass production for early customers since October. The new funds raised will be used to expand production. BLOOMBERG, REUTERS