Germany has announced plans to invest around €2 billion into its semiconductor industry. This funding aims to develop advanced chip production capabilities and strengthen the European semiconductor ecosystem, according to reports from Bloomberg News. The move aligns with the European Chips Act, which promotes local manufacturing to reduce reliance on Asian suppliers.
A spokesperson from the Economy Ministry stated that the subsidies would be in the “low single-digit billion euro range.” The funds will support projects that establish cutting-edge production capacities, exceeding current technological standards.
The ministry issued a call for applications earlier this month, inviting chip companies to submit proposals for projects that enhance Germany’s and Europe’s microelectronics sustainability.
The European Chips Act, passed in 2023, aims to double the EU’s market share in global semiconductor production to 20% by 2030. This initiative has gained urgency due to supply chain disruptions during the pandemic and geopolitical tensions over Taiwan, a major chip supplier.
Challenges in Germany’s Semiconductor Push
Germany’s renewed focus on chip manufacturing follows setbacks in its semiconductor ambitions. In September, Intel postponed a €30 billion chip factory in Magdeburg, which would have been the largest project under the European Chips Act, supported by €10 billion in subsidies. Additionally, Wolfspeed Inc. and ZF Friedrichshafen AG canceled a planned chip production venture in western Germany.
Despite these challenges, Germany continues to attract investment in the sector. Initial subsidies under the European Chips Act were awarded to Intel and a joint venture between Infineon and TSMC in Dresden. The new round of funding will support 10 to 15 projects, covering areas such as raw wafer production and chip assembly.
Governments worldwide are prioritizing local semiconductor production due to its importance in technologies like artificial intelligence and everyday electronics. Germany’s funding initiative reflects a broader European effort to ensure technological sovereignty and secure supply chains in an increasingly volatile global market.
The final allocation of the subsidies may depend on the new German government, set to take office in February, which could influence budget decisions.
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