The German government plans to allocate around €2 billion ($2.11 billion) to the semiconductor industry to strengthen its chip manufacturing capabilities, reports Bloomberg.
The move comes two months after US semiconductor manufacturing company Intel suspended its plan to build a €30 billion chip factory project in Magdeburg.
German Economics Ministry spokesperson Annika Einhorn was quoted by the news agency as saying the funds will support chip companies in developing “modern production capabilities that significantly exceed the current state of the art.”
The new funds are intended to support 10 to 15 projects, focusing on areas such as raw wafer production and microchip assembly.
The spokesperson stated that the funds would be in the “low single digit billion euro range”.
Einhorn said: “The funded projects should contribute to a strong and sustainable microelectronics ecosystem in Germany and Europe.”
The ministry previously called on chip companies to apply for the new subsidies.
The latest move reflects a global trend of governments investing in the chip industry to secure local production of vital components, a need highlighted by Covid-era supply disruptions and geopolitical tensions.
In October 2024, Financial times reported that Wolfspeed and its partner ZF Friedrichshafen have suspended plans to build a €3 billion chip factory in Ensdorf, Germany.
The decision was blamed on slower-than-expected adoption of electric vehicles in Europe, which has led to reduced demand for the silicon carbide chips the factory was supposed to produce.
The European Union has set a goal to double its global chip market share by 2030.
EU concerns about supply chain fragility and dependence on Asian producers have fueled efforts to boost local production.
“Germany plans €2 billion in subsidies to boost chip production” was originally created and published by Verdict, a brand owned by GlobalData.
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