Technology Germany to Pour $22 Billion into Chip Production: Intel, TSMC to Benefit

silversurfer

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According to a new report, Germany's government plans to allocate €20 billion ($22 billion) to enhance semiconductor production in the country. This initiative is designed to strengthen the national tech industry and ensure a steady supply of key components in light of increasing geopolitical instability. A significant proportion of these funds, approximately 75%, is earmarked for multinationals such as Intel from the U.S. and TSMC from Taiwan, Bloomberg reports.

The aid package is set to be distributed by 2027. About half of the aid package, €10 billion (a third of the total investment in the site), is said to have been allocated to Intel for its new production facility near Magdeburg, Germany, Eastern Germany. The German government is also finalizing negotiations with TSMC to invest in a manufacturing facility in Dresden and build various microcontrollers that are consumed by Germany-based automakers. The government is looking forward to subsidizing around €5 billion, half of the total investment, in this fab.

Furthermore, approximately €1 billion is designated for Infineon, around 20% of the total investment in a new Dresden-based semiconductor plant, Bloomberg report. In addition, German automotive supplier ZF Friedrichshafen AG and U.S.-based chipmaker Wolfspeed are also expected to receive state funds to establish a silicon carbide chip factory near the French border in Saarland. The joint venture seeks subsidies covering roughly 25% of the costs, which equates to about €750 million.
 

MuzzMelbourne

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I feel sorry for the Taiwanese. All this global investment in domestic fab plant's sort paves the way for a Chinese push for reunification.
 
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The European Union's plan to bolster domestic semiconductor production will become law after ministers completed the final approval on Tuesday. From a report: The EU's Chips Act, which was approved by the European Parliament earlier this month, will take effect once it's published in the bloc's Official Journal. The European Commission first proposed the $47.5 billion Chips Act as part of an ambitious goal of producing 20% of the world's semiconductors by 2030. Numerous companies, including Intel and STMicroelectronics, have already announced new sites in Europe.
 

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US semiconductor manufacturer GlobalFoundries has criticized the German government's €20 billion ($22 billion) in semiconductor subsidies, claiming it will distort competition.

Germany's Federal Ministry for Economic Affairs has confirmed local semiconductor production will be boosted by the off-budget Climate and Transformation Fund starting next year.
 

silversurfer

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The German government is committed to supporting the construction of chip fabs by Intel, TSMC, and Wolfspeed, despite facing financial challenges due to a budget crisis, reports HardwareLuxx. In fact, Intel and Wolfspeed have already received firm funding commitments from the government.

"The decisive sentence is, all projects that we have conceived must be made possible," said Robert Habeck, Minister of Economy, emphasizing strong support for the fab projects.

Germany has committed $22 billion in incentives to semiconductor companies such as Intel, TSMC, and Wolfspeed, leading to commitments to build new fabs in Germany. However, the 2024 Federal Budget in Germany is facing delays due to a decision by the Federal Constitutional Court, which found reallocation of unspent Corona crisis funds to the Climate and Transformation Fund in 2022 unconstitutional. The German government had intended to use this fund to subsidize chip manufacturing, which is why they had to postpone the final discussions and approval of the budget.
 

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