Germany to invest €20bn in domestic chip production

The German economy ministry has said that the country plans to invest around €20 billion in the semiconductor industry in the coming years.

The move comes as countries around the world look to reduce their dependence on South Korea and Taiwan, which produces over 60 per cent of the world’s semiconductors.

Germany has already attracted global chipmakers to the country by offering subsidies under the EU Chips Act – legislation which aims to double the EU’s share of global semiconductor output by 2030.

Intel is one such company, and has announced plans to invest €30 billion in two plants based in Magdeburg, reflecting Germany’s biggest ever foreign investment. Contract chipmaker TSMC meanwhile has been in years of talks with Saxony over the creation of a fabrication plant in Dresden.

The €20 billion investment from the German government will be divided between Intel – which will get subsidies worth nearly €10 billion – and other chipmakers including Infineon, Globalfoundries and the aforementioned TSMC.

Money will come from Germany’s Climate and Transformation Fund, which will give funding subject to approval from the European Commission.

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