Intel says it will no longer consider UK as site for huge chip factory because of Brexit

Intel says Brexit means it is no longer considering the UK as the site to build a major new chip factory as part of its $95bn (£70bn) global expansion plans.

Pat Gelsinger, the chief executive of the world’s largest maker of semiconductors, said they were now only considering European Union member states to host a new European site.

Intel is planning to invest £70bn in infrastructure over the next 10 years to boost its output by setting up new semiconductor plants. The company said that the US and Europe were too dependent on Asia for their chips and rival manufacturers continue to expand in countries such as South Korea and Taiwan.

“I have no idea whether we would have had a superior site from the UK,” Mr Gelsinger told BBC News. “But we now have about 70 proposals for sites across Europe from maybe 10 different countries. We’re hopeful that we’ll get to agreement on a site, as well as support from the EU... before the end of this year.”

The Intel boss said that the company is hoping to secure subsidies from governments in the US and European countries on the basis that dependency on Asia for microchips could threaten their national security. “It is clearly part of the motivation of a globally balanced supply chain that nobody should be too dependent on somebody else,” Mr Gelsinger said.

The company’s plans for expansion in the EU market come amid a global shortage of semiconductors, which is affecting the supply chains of all kinds of goods, from cars to computers, inflating the prices of many goods where microchips are vital components.

Mr Gelsinger said that the crisis might continue until Christmas and that while they were “working like crazy to catch up, it’s going to be a while”. Things may improve slightly next year but it would take until 2023 for the situation to fully stabilise, he said.

Being ousted from Intel’s expansion plans is not the only fallout Britain has suffered due to the country’s departure from the European Union. Dozens of companies in the UK had cut jobs, beefed up their European operations or issued warnings on the impact of Brexit even before the final deal came into effect on 31 January last year.

In January 2019, the British bank Barclays moved £166bn of its clients’ assets to Dublin, saying that it could not wait any longer to implement Brexit contingency plans. As of last year at least 140 companies had moved to the Netherlands since the 2016 Brexit referendum, according to the Netherlands’ Foreign Investment Agency.