Germany will make 20 billion euros in subsidies available for chip production

The German government plans to invest twenty billion euros to boost chip production in the country. The amount is to be distributed in the coming years to both German and international companies, including Intel and TSMC.

The German fund will be available for projects by German and international companies, writes Bloomberg. Germany expects to have distributed the money to companies working on chip production projects in the country by 2027. The country wants to use the subsidy to strengthen its own tech sector and ensure the supply of important components now that geopolitical tensions are increasing.

Germany has previously promised ten billion euros to Intel, which amounts to half of the entire subsidy pot. Intel plans to build an advanced chip manufacturing site near the German city of Magdeburg. Furthermore, market leader TSMC from Taiwan will probably receive up to five billion euros in subsidies for the construction of a factory near Dresden, although these plans are not yet concrete. Infineon will receive one billion euros for the construction of a new chip factory in Dresden. ZF/Wolfspeed will receive a subsidy of 750 million euros for a new silicon carbide chip factory in Saarland, near the border with France.

This leaves at least three billion euros in subsidies for projects by other companies. This may benefit chip companies that are already active in Germany, such as GlobalFoundries and Bosch, Bloomberg speculates. Bosch previously said it would invest up to three billion euros in its chip production division. Part of this is probably financed by the German fund, although the amount is not known.

Various countries and regions are working on subsidy schemes for the chip sector. This is happening due to increasing geopolitical tensions between the US and Taiwan, among others, and the Russian invasion of Ukraine. Countries therefore want to become less dependent on other regions for the supply of chips. For example, the EU member states are jointly investing 45 billion euros in chip production in the region, much of which comes from individual member states such as Germany and France. The United States is also making approximately $53 billion available for chip production. Asian countries such as Taiwan, South Korea and Japan are also investing in their chip sectors.