But semiconductors is much much much more than high end CPUs. There’s totally a huge opportunity for local chip companies to grow. And having company like Intel may help, as people who work there will get a lot of know how that they can take to smaller local companies to help them grow.
Why? Intell lost the mobile, and is currently losing desktop/server. RISC-V is more promising each passing day. If India can do this, why can't Europe: https://news.ycombinator.com/item?id=31243674
Intel never really had the mobile market and was seemingly never particularly interested in it. They are currently heavily pressured by AMD and ARM based cpus both in the consumer and server markets.
India is hoping it can convince Intel and TSMC to set up fabs in the country as part of their multibillion-dollar manufacturing expansion blueprint.
Bloomberg reported Tuesday that India's government is making pitches to both companies, backed with a $10 billion subsidy plan that can be used to cover up to half of the cost of a new chipmaking plant. The plan also covers new plants for display manufacturers.
By the time any incumbent in Germany would be ready, even assuming they start right now, that fab will be heavily outdated.
But there’s literally bazillion other semiconductors (and they are the main reason for the shortage, not high end CPUs) that you can competitively manufacture and increase supply chain locality for critical components.