How Poland snagged Intel’s multi-billion dollar investment

By Karol Badohal and Supantha Mukherjee

WROCLAW, Poland/STOCKHOLM (Reuters) – Poland’s third-largest metropolis Wroclaw beat rivals final week to be dwelling to the subsequent multi-billion greenback Intel chip manufacturing unit in Europe, with a two-year marketing campaign promising subsidies, infrastructure, expertise and a slice of American life.

Within the face of an unprecedented semiconductor scarcity, Europe is providing billions of euros in subsidies to cut back its dependence on Asia. In return, Intel is committing large sums and with Germany already bagging a 30 billion euro funding, Poland determined to crash the occasion.

Its eventual success may be seen as a lesson in perseverance.

The U.S. chipmaker mentioned final Friday that it had determined to take a position as much as $4.6 billion within the new semiconductor facility close to Wroclaw.

Interviews with half a dozen Polish authorities officers and firm executives revealed beforehand unreported particulars on how a small metropolis in southwestern Poland ticked all of the bins to get what its Prime Minister mentioned was the biggest greenfield funding in its historical past.

Poland initially impressed Intel executives with the pace by which it responded to queries and addressed issues, Intel mentioned.

“Once we started the method, we hadn’t thought-about Poland,” Intel CEO Pat Gelsinger instructed Reuters.

“As you’re selecting a location, think about you’re going on a date. You’ve gotten a way, oh they really need this to work,” Gelsinger mentioned. “We positively got here away with a powerful perception that the native authorities need to make this work.”

Poland began courting Intel in July 2021. Authorities and municipal officers met with the corporate repeatedly over the subsequent two years, based on interviews with 5 officers and three Intel executives.

Two authorities companies – the Polish Funding and Commerce Company (PAIH) and the Industrial Improvement Company (ARP) performed a key function within the course of, officers mentioned.

Many conferences had been carried out remotely attributable to COVID-19 restrictions, officers mentioned. Marcin Fabianowicz, director of the PAIH’s funding centre later met with a consultant from ARP and two senior Intel executives.

“After the primary (in-person) assembly I used to be satisfied Poland had a shot at getting the undertaking,” he mentioned. “The talks had been heat and on the right track.”

However when Intel introduced its European investments in March 2022, Germany was awarded a serious manufacturing unit in Magdeburg whereas Intel instructed Poland it will solely broaden its current facility in Gdansk.

Poland was undeterred, ultimately clinching a deal in a two-day assembly final month, officers mentioned.

“We by no means mentioned one thing cannot be performed,” Fabianowicz mentioned.

Codenamed “Mission IQ”, authorities and municipal officers labored confidentially on methods to lure the chipmaker.

A staff from an company selling the event of Wroclaw put collectively a presentation highlighting its high quality of life, household services, colleges, bike lanes, swimming swimming pools and financial and demographic knowledge.

Intel executives had been additionally impressed by Wroclaw being dwelling to Poland’s American soccer and basketball champions.

‘SNOWBALL EFFECT’

Intel’s new plant can be on a 285 hectare plot, beside one other chip manufacturing unit, the edible selection made by PepsiCo and a manufacturing unit which makes home windows.

The worldwide scarcity of semiconductors has impacted manufacturing of every thing from cellphones to electrical automobiles, a scarcity prone to proceed all through 2023, based on the European Parliament, because it takes two to a few years to construct a brand new chip-making manufacturing unit.

The land at Wroclaw is split between two municipalities — Miekinia and Sroda Slaska.

The area will spend money on new roads to the manufacturing unit, electrical buses, a water remedy facility and excessive voltage energy strains, the mayor of Sroda Slaska Adam Ruciński instructed Reuters.

Intel has additionally been allowed to assemble buildings 50 metres (54.68 yards) excessive, greater than the same old 20 metres restriction, he mentioned.

Poland is hoping to lure different firms like Taiwan Semiconductor Manufacturing Corp (TSMC), the world’s largest contract chipmaker, to spend money on the nation.

Talks with TSMC began final 12 months, a number of officers mentioned.

“We’re at a degree the place we’re getting our 5 minutes (of fame), so quite a lot of entities have an interest,” mentioned Jakub Mazur, deputy mayor of Wrocław. “The snowball impact with Intel coming into will trigger talks from the Taiwan path to come back again to us.”

($1 = 0.9157 euros)

(Reporting by Karol Badohal in Wroclaw and Supantha Mukherjee in Stockholm; Modifying by Matt Scuffham and Elaine Hardcastle)

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