Intel says it will build an advanced packaging and assembly site in Italy. 

The town of Vigasio in the northeastern Veneto region has been named the preferred site for a new multibillion-euro chip factory in Italy, reports say. 

Intel's Italian plans are part of a wider plan announced by the US chipmaker last March to invest up to 80 billion euros (AU$118.58 billion) over the next decade in building capacity across Europe. 

Intel says the 4.5-billion-euro Italian plant will create 1,500 jobs and an additional 3,500 jobs across suppliers and partners, with operations to start between 2025 and 2027.

The factory is expected to include an advanced semiconductor packaging and assembly plant, using new technologies to weave together full chips out of tiny separate tiles.

Insiders have told reporters that the site was picked because it is well connected with Germany and in particular with the city of Magdeburg, where Intel will build two factories.

Reports say the Italian government is prepared to fund as much as 40 per cent of Intel's total investment in Italy.