Digital Platforms and Services

What’s up with… Intel, SoftBank, KPN

By TelecomTV Staff

Jun 19, 2023

  • Intel strikes fab deal in Germany and preps major investment in Israel
  • SoftBank seals satellite deal
  • KPN snaps up FTTH network

In today’s industry news roundup: Intel strikes a revised €30bn chip plant agreement with the German government and is set for a major investment in Israel too; SoftBank is the latest operator to work with LEO satellite company OneWeb on expanding its broadband services coverage; Dutch national operator KPN acquires fibre access network assets; and much more!

It’s a big day for Intel! The giant chip company has agreed a new, revised €30bn deal to build two chip plants in Germany and is reportedly set to spend $25bn on new facilities in Israel. In Germany, Intel and the country’s government have finally agreed revised terms for the vendor’s planned two chip fabrication plants (‘fabs’) in Magdeburg, the capital of the state of Saxony-Anhalt. The plan for the so-called Silicon Junction development was initially announced in March 2022 with a budget of €17bn and positioned as part of a broader, decade-long European investment strategy, but had been held up by negotiations about how much Intel would receive in federal subsidies and benefits for investing in Germany (the original agreement was for €6.8bn in aid, but Intel then asked for more). Now the two fabs have a much higher budget and will “enter production at a more advanced technology than originally planned.” They are expected to create 7,000 construction jobs over the course of the first phase of the build, approximately 3,000 permanent jobs at Intel, and result in the creation of “tens of thousands of additional jobs across the industry ecosystem,” according to Intel. And crucially for the vendor, the new plan comprises “increased government support that includes incentives, reflecting the expanded scope and change in economic conditions since the site was first announced.” Intel CEO Pat Gelsinger noted: “Building the ‘Silicon Junction’ in Magdeburg is a critical part of our strategy for Intel’s growth. Combined with last week’s announcement of our [$4.6bn] investment in Wrocław, Poland, and the Ireland sites we already operate at scale, this creates a capacity corridor from wafers to complete packaged products that is unrivalled and a major step toward a balanced and resilient supply chain for Europe. We’re grateful to the German federal government, Chancellor Olaf Scholz and the government of Saxony-Anhalt for their partnership and shared commitment to fulfilling the vision of a vibrant, sustainable, leading-edge semiconductor industry in Germany and the EU.”  

As if that wasn’t big enough news, Israel’s prime minister, Benjamin Netanyahu, announced on Sunday that Intel had agreed to invest $25bn on a new chip plant in the southern city of Kiryat Gat, calling it the largest ever international investment in the country. Intel stated that its operations in Israel had “played a crucial role” in the company’s global success, and that its “intention to expand manufacturing capacity in Israel is driven by our commitment to meeting future manufacturing needs... and we appreciate the continued support of the Israeli government,” according to a report from Reuters. The news from Germany and Israel comes at a critical time for the world’s digital infrastructure supply chain, following years of disruption caused by chip shortages and just as concerns are growing that the future semiconductor output from Taiwan might be affected by political and military intervention by China. 

Japanese operator SoftBank will begin preparations to provide low-earth orbit (LEO) satellite communications services in the country as part of a collaboration with satellite company OneWeb. The announcement comes after OneWeb completed its global constellation deployment in March 2023 which, according to the company, translates to it being capable of delivering global coverage by the year end. The two companies joined forces in May 2021 to promote OneWeb’s satellite communication services both in Japan and globally – see SoftBank and OneWeb to collaborate on satellite communication service business deployment in Japan and global markets. SoftBank has been vocal about its intention to offer non-terrestrial network (NTN) solutions since 2021 – and plans to use them to deliver a multi-layered network combining terrestrial mobile networks with LEO and geostationary orbit (GEO) satellites in space, in addition to high-altitude platform stations (HAPS) in the stratosphere, as part of SoftBank’s 5G evolution and 6G plans. In September 2021, it acquired around 200 patents for HAPS from the now-defunct Alphabet project called Loon.

Staying with SoftBank… The company has expanded its commitment to becoming “virtually net zero” to include the rest of the companies in the group. The commitment will cover a number of entities, including its eponymous Japanese operator division, Softbank, electrical supply company SB Power, IT service management company SB Technology, and Z Holdings which owns IT company Yahoo! Japan, messaging app Line and mobile payment service PayPay. Its pledge is to achieve net-zero greenhouse gas (GHG) emissions by 2050 across all group companies. SoftBank also plans to work with its subsidiaries, suppliers and “other business partners” to “mitigate climate change and contribute to the realisation of a decarbonised society”. Read more.

Dutch national operator KPN, which already claims to pass 4 million premises in the Netherlands with its fibre access network, has acquired a fibre-to-the-home (FTTH) network that reaches 127,000 premises in The Hague, Rotterdam and Eindhoven from Primevest Capital Partners. Financial terms were not shared. “The acquisition is in line with KPN’s strategy to expand its fibre network and cover [about] 80% of the Netherlands with fibre by 2026,” the operator noted. 

Huawei is reportedly seeking to obtain licensing fees from about 30 Japanese telecoms-related companies using its patented technology. Citing a source at Huawei’s Japan division, Nikkei Asia has reported that royalty collection is now seen by the Chinese company as an increasingly important revenue stream amid trade sanctions in several regions, including the US and Europe. While the move is seen as unusual for a vendor of that calibre, Huawei is reportedly in talks with small and medium-sized companies about collecting proceeds for its wireless communication modules. Fees sought are said to be around ¥50 ($0.35) per unit or 0.1% of the price of the system. According to the report, Huawei may request payments from more Japanese companies going forward, and is carrying out similar practices in South-east Asia.

Here’s a statistic for our times… The research unit of professional services and systems integration giant Capgemini has conducted a GenAI survey of around 10,000 adults in 13 countries and found thatover half of the respondents (53%) trust generative AI to assist with financial planning. Globally, 67% of consumers indicated that they could benefit from receiving medical diagnoses and advice from generative AI, and 63% indicated that they are excited by the prospect of generative AI aiding with more accurate and efficient drug discovery. Additionally, two-thirds (66%) of consumers would be willing to seek advice from generative AI for personal relationships or life and career plans, with baby boomers the most likely (70%) age group to use it for this purpose.” Gulp! 

Beleaguered South African operator Telkom SA, which has already been embroiled in two abandoned consolidation talks processes in the past year (one involving wireless ISP Rain in early 2023 and the other with giant rival MTN late last year), is once again in the M&A spotlight. The operator confirmed last week that it has received, and is now evaluating, an offer to acquire a controlling stake in Telkom from a consortium led by its former CEO Sipho Maseko, which includes pan-African group Axian Telecom and South Africa’s Government Employees Pension Fund (as managed by the Public Investment Corporation, or PIC). Telkom has requested further details from the consortium, including proof that it has funding and greater clarity on how much it is offering to pay for the stake in question (a detail that, you’d think, might have been mentioned right up front). News of the offer, the preparation for which Bloomberg had uncovered at the end of May, came as Telkom reported its full fiscal year financial results to the end of March: While Telkom’s mobile customer numbers increased by almost 8% to 18.3 million and revenues edged up slightly to 43.1bn rand (ZAR) (US$2.4bn), earnings before interest, taxes, depreciation and amortisation (EBITDA) plummeted by almost 20% to ZAR 9.6bn ($528m) as operating and device costs soared.    

- The staff, TelecomTV

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