The new facility, to be located in Wroclaw, "will help meet critical demand for assembly and test capacity that Intel anticipates by 2027," the firm said in a statement.
The investment is aimed at helping the European Union build a more resilient semiconductor supply chain, it added.
The EU aims to reclaim 20 percent of global semiconductor manufacturing capacity by 2030 and has invested in chip facilities in Germany and Ireland to boost the bloc's production.
The announcement follows a difficult first quarter of 2023 for Intel.
In April, it announced a massive fall in sales for the January-March period because of a steep drop in demand for semiconductors, especially those used in PCs.
Intel is one of the world's leading semiconductor firms, making a wide range of products, including the latest-generation chips.
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