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Singapore firm announced Italian plant in March

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At least three Italian regions competed to host plant

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Selected site expected to be announced next week

By Elvira Pollina and Giuseppe Fonte

MILAN/ROME, June 20 (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 ( MRVL ), 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 ( INTC ).

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)