US chipmaker Wolfspeed and auto supplier ZF have shelved plans for a semiconductor factory in Germany, local officials said on Wednesday, dealing another blow to Berlin’s chipmaking ambitions.
The project was “not abandoned, but pushed back on the timeline to an unspecified point in time,” said Anke Rehlinger, the leader of the western region of Saarland where the plant would be built.
Wolfspeed had told officials that the group was “committed” to Saarland but was “delaying the investment until an unspecified date,” Rehlinger said at a news conference.
The postponement of the factory, which should break ground next year, comes after other planned investments by chipmakers in Germany were thrown into the air.
US chip giant Intel said in September it would delay a planned project in Germany by about two years due to “expected market demand” being lower than previously thought.
The planned factory in the eastern city of Magdeburg, which had been announced with much fanfare, would be backed by a huge 10 billion euro subsidy from the German government.
EU countries including Germany are trying to boost domestic supplies of semiconductors to reduce dependence on Asia to produce the key component used in everything from smartphones to fighter jets.
The planned investment in Saarland was smaller – about 2.7 billion euros – but the delay and uncertainty surrounding the project were a “blow”, Rehlinger said.
Wolfspeed and ZF have both faced challenges in recent months, with Rehlinger alluding to weak global demand for electric vehicles and chips in Europe.
German auto supplier ZF announced sweeping job cuts earlier this year as it struggles with the move to electric vehicles and foreign competition.
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