FILE PHOTO: A Silicon Box signage is pictured during the opening of their advanced semiconductor manufacturing foundry in Singapore July 20, 2023. REUTERS/Edgar Su/File Photo
MILAN/ROME (Reuters) - Singapore-based semiconductor firm Silicon Box plans to pick the town of Novara in the industrialised northwest Piedmont region as the location for its new multibillion-euro chip factory in Italy, two people close to the matter told Reuters on Thursday.
The three-year-old startup, created by the founders of U.S chipmaker Marvell, will invest 3.2 billion euros ($3.4 billion) to produce in Italy so-called "chiplets", which can be the size of a grain of sand, under a government-backed deal.
Chiplets are brought together in a process called advanced packaging, a cost-efficient way to bind small semiconductors to form one processor that can power everything from data centres to household appliances.
The project is part of long-standing Italian efforts to attract investment from technology companies, including a shelved deal with U.S. chipmaker Intel.
Silicon Box and Italy's industry ministry announced the investment in March without saying where the plant would be located.
Asking not to be named as deliberations are not public, the sources said that Silicon Box was leaning towards picking the city of Novara from a shortlist also including two sites in the northern regions of Lombardy and Veneto.
The industry ministry declined to comment, while Silicon Box did not immediately respond to a request for comment.
One of the sources said Silicon Box and the industry ministry were expected to confirm the location of the plant on June 28.
At full capacity, the investment is expected to generate 1,600 new direct jobs, in addition to the indirect jobs generated both for the construction of the facility and in the wider supply and logistics ecosystem involved.
Industry Minister Adolfo Urso said in March the project had around 4 billion euros in expected operational costs spread over 15 years.
Italy has set aside almost 5 billion euros in state help to attract foreign chipmakers.
Under the EU Chips Act, public money is provided to a large extent by national governments while the vetting of projects takes place in Brussels.
French-Italian firm STMicroelectronics last month won EU approval for a 5 billion-euro silicon carbide plant being built in Italy.
($1 = 0.9331 euros)
(Reporting by Elvira Pollina in Milan and Giuseppe Fonte in Rome, editing by Mark Potter)
