AMD invests $400M for a new design center in Bengaluru.
Intel opened a facility in Bengaluru last year and two factories in Germany recently.
India and Germany offer tax breaks and R&D support to chip makers.
Pop the popcorn and pull up a chair, folks. It's a full-on battle in the tech world as AMD and Intel, two American tech giants, go head-to-head in a new arena: India and Germany. Yes, you heard it right! These two chip wizards are duking it out by setting up ultra-cool, cutting-edge centers in these countries.
First up, we've got AMD flexing its muscles with a whopping $400 million investment to build a swanky new campus in Bengaluru, India. This investment will involve the construction of a new campus in Bengaluru, which will be the company's largest design center. This new facility is expected to be operational by the end of 2023 and will include big lab space and advanced tools.
The announcement was made by AMD's Executive Vice-President and CTO, Mark Papermaster, at the Semicon India 2023 event, inaugurated by India's Prime Minister, Narendra Modi. The new campus, occupying an area of 500,000 square feet, will expand AMD's presence in India to a total of 10 locations, including New Delhi, Gurgaon, Hyderabad, and Mumbai.
But hold up! Intel isn't sitting back and sipping a mocha latte. Intel India, not to be outdone, opened a sparkling new facility in Bengaluru last year, which can host up to 2,000 employees. That's a lot of coffee breaks and water cooler chats!
Then there's Germany. Intel decided to go big or go home and announced a colossal €30bn investment to build not one, but two new semiconductor factories. These factories aren't just fancy buildings, folks. They're going to use what's called Angstrom-era technology. That's techie talk for components less than one nanometer in size.
Both India and Germany provide a robust support structure for chip makers like AMD and Intel, offering tax breaks, grants, loans, and even R&D support. In Germany, companies can receive a reduced corporate tax rate of 9% down from 15%, potentially substantial grants based on investment size and location, and subsidised loans with interest rates below market rate.
India offers similar incentives with a slashed corporate tax rate from 30% to 15% for semiconductor firms, investment-dependent grants, subsidized loans, and an extra benefit in the form of R&D support. The R&D support, given through grants, loans, or tax breaks, aids in the development of new semiconductor technologies. These benefits underscore the strategic decisions of AMD and Intel to expand their operations in these regions, while also contributing to the advancement of global semiconductor technology.
Layoffs and new factories at the same time?
The layoffs and simultaneous factory openings by chip giants can be attributed to several factors. Both Intel and AMD are shifting their manufacturing strategies. Intel, for instance, is transitioning to a new business model where they will be manufacturing chips for other companies in addition to their own, a strategy known as IDM 2.0. This requires new facilities and potentially different skill sets, leading to both layoffs and new hires. source
The semiconductor industry is rapidly evolving, with new technologies and manufacturing processes being developed. This can lead to job losses in areas that become obsolete, while new jobs are created in areas that are expanding. For example, Intel is investing heavily in EUV (extreme ultraviolet) lithography, a new technology for manufacturing smaller, more efficient chips. This requires new factories and equipment, and workers with different skills.
There is a push to diversify the global chip supply chain, which is currently heavily concentrated in Asia. This has led companies like Intel and AMD to build new factories in different regions, including the United States and Europe. This geographical diversification can lead to job losses in some areas and job creation in others.
Some of the layoffs may be part of cost-saving measures. As companies strive to remain competitive, they often look for ways to reduce costs and improve efficiency. This can sometimes lead to job losses, even as the company is investing in new areas.
The ongoing global chip shortage has put pressure on semiconductor companies to increase production. This has led to significant investments in new factories. However, the increased demand for chips has also led to operational challenges and workforce adjustments. source
It's important to note that while layoffs are certainly impactful for those affected, they represent a small fraction of these companies' overall workforce. The new factories being built will create many new jobs and are part of these companies' strategies to stay competitive in the rapidly evolving semiconductor industry.
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Yetnesh Dubey
Yetnesh works as a reviewer with Digit and likes to write about stuff related to hardware. He is also an auto nut and in an alternate reality works as a trucker delivering large boiling equipment across Europe. View Full Profile
