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Piemonte scored one of the biggest foreign direct investment wins in the whole of Europe last summer, when Singapore-based Silicon Box picked Novara, a town between Turin and Milan, as the site for its semiconductor advanced packaging foundry.  

The region has a long tradition in microelectronics. That  goes all the way back to Adriano Olivetti, who pioneered computing in Italy from his base in Ivrea, and it is anchored in the research produced by the likes of the Polytechnic University of Turin and private research institutions such as the Donegani in Novara.

Despite this heritage, today Piemonte’s semiconductor ecosystem remains limited to a handful of world-class facilities supplying components and equipment to microchip producers. Silicon Box’s announcement, which promises to bring its chiplets solutions to Europe (see page 12), was a real shot in the arm for this regional ecosystem, priming it to become one of the driving forces of the industrial transition of Italy’s north-west. 

A wake-up call

Piemonte’s industrial ebbs and flows have been traditionally linked to the automotive sector, with Turin at the heart of the region’s mobility cluster. The troubles experienced by the sector in the early days of the Covid-19 pandemic, however, provided an unexpected wake-up call. 

“The regional government understood the strategic importance of microchips when they realised they couldn’t produce cars in Turin any longer because of the global shortage of microchips during the pandemic,” recalls Luciano Bonaria, CEO of Spea, a producer of semiconductor test equipment.  

This insight culminated in the regional government becoming a founding member of the European Semiconductor Regions Alliance (Esra) in September 2023. Esra brings together 30 regions from 13 European countries “to promote the importance of the semiconductor industry for the economic development of our regions, countries and Europe as a whole”, and contribute to the implementation of the European Chips Act, according to its founding documents. Piemonte will hold the rotating chair in 2025. 

Leveraging mechanics 

These efforts to raise the profile of Piemonte’s semiconductor industry have been validated recently by interest from private companies. Its regional industrial heritage, which combines both electronics and mechanics, is proving fertile ground — particularly for companies producing equipment for the semiconductor industry. 

“Here companies can find an industrial fabric with strong understanding of electronics and mechanics; an ecosystem able to produce high-skilled and technical talent, but also support the development of production processes with cutting edge research,” says Luciano Scaltrito, a professor at the Polytechnic University of Turin. 

Aixtron, a German company producing deposition equipment for the semiconductor industry, announced a €100m investment in Orbassano, on the outskirts of Turin, in June 2024 to establish a third production hub to add to its existing ones in Herzogenrath, Germany and Cambridge, UK.

“We will be located in the heart of the manufacturing ecosystem of northern Italy, being close to many strong suppliers and world-class universities,” Aixtron CEO Felix Grawert said in a statement in June. The new facility will create 300 new jobs. 

Meanwhile, Spea is looking to invest €150m in the research, design and development of a new generation of semiconductor test equipment, for which it is also seeking support from the Italian government and the European Chips Act. The move will bring along a major upgrade of the company’s headquarters in Volpiano, where the company employs about 1000 people, Mr Bonaria notes. 

The Novara cluster

If the production of equipment for the sector plays to Piemonte’s strengths, the development of the microelectronics cluster in Novara promises to take the regional ecosystem to a new level. 

“We will do big things for the European ecosystem [with the site in Novara],” Michael Han, Silicon Box’s head of business, tells fDi Intelligence. The Singaporean company is expecting to create 1600 new jobs in the area. 

On the other side of Novara, Memc (a subsidiary of Taiwan’s GlobalWafers) operates one of Europe’s largest sites for the production of silicon wafers, the circular silicon slices that serve as the foundational substrate on which microchips are built.

The company is now wrapping up a new line in Novara for the production of 300m wafers, a €400m project that received €103m of EU support in the form of a research and development (R&D) grant under the Important Projects of Common European Interest (Ipcei) scheme.  

The new line will make 150 new hires and be up and running by the end of 2025. It will put Memc in a better position to meet a market demand that, though vulnerable to fluctuations, remains on a long-term upward trajectory, while also adjusting to the new forces that have reshaped global investment following the pandemic. 

“There are two contrasting inputs at play at the moment,” say Memc president Marco Sciamanna and Marco Maffè, GlobalWafers’ vice president for marketing. “The first one, which is the one supported by Ipcei, encourages us to shorten supply chains as governments in the US, Europe and elsewhere are trying to regionalise a strategic value chain like semiconductors. The contrasting force is pushing us to pursue the geographic diversification of supply chains — or the risk is that they are too concentrated and more vulnerable to the disruptions that we have seen in the past years.”  

Novara’s semiconductor cluster is strengthened by its proximity to Milan, which lies just 50km to its east and whose well-developed semiconductor ecosystem is led by STMicroelectronics, a French-Italian integrated device manufacturer. Additionally, the Italian government has set up Chips.IT Foundation, a new R&D centre for the design of semiconductors in Pavia, about 90km south-east of Novara. 

Strategic value

It will be a challenge for Piemonte to accommodate the need for talent of its fast-growing semiconductor ecosystem. According to Mr Scaltrito’s estimate, there are about 3500 people employed in the sector in Piemonte at the moment. That means the projected 1900 new jobs to be created by Silicon Box and Aixtron account for more than half the active talent in the local semiconductor industry, which will challenge talent availability and retention dynamics in the region. 

But with the EU willing to double its global share of semiconductors production to 20% by 2030, these developments have a strong strategic value for the whole continent.

In the case of Memc, the new production line, which will produce 1 million 300mm wafers per year, with room to scale it up to 2 million per year, will partly replace some of the company’s imports from Asia, say Mr Sciamanna and Mr Maffè. Meanwhile, Silicon Box’s chiplets technology promises to bring advanced packaging to the European value chain by providing clients with system-in-a-package solutions that carry the promise of productivity and efficiency gains. 

Such developments may well prove strategic for Piemonte’s industrial transition too, as the presence of a growing microelectronics ecosystem can ease the shift towards digital technologies for a regional industry whose products remain largely anchored in mechanical engineering. 

“There is a migration towards electronics within mechanics, no one can deny that,” says Spea’s Mr Bonaria. “What’s the point for the likes of Memc, Vishay and Spea to stay in Piemonte and for Silicon Box to set up here? [It] is to connect and integrate them with a region that is world-class for industrial know-how.

“Our industries have to understand that they have to add microelectronics components to their products. Once they do, there will be an industrial renaissance,” he adds.

This article is part of the Special Report:
Piemonte's next industrial horizons
Read more articles from the report