December 3, 2024 /SemiMedia/ — The German government is set to provide approximately €2 billion in subsidies to strengthen its domestic semiconductor industry, aiming to support 10–15 projects, including raw wafer production and advanced microchip assembly. According to Annika Einhorn, a spokesperson for the Ministry of Economic Affairs, this funding will drive the development of cutting-edge manufacturing capacities beyond current technological standards​

This initiative aligns with the European Chips Act, which seeks to bolster the EU's semiconductor capabilities and reduce reliance on external suppliers. The act has allocated €3.3 billion in EU funding, complemented by member states’ investments, to promote research, innovation, and advanced pilot production lines across Europe.

However, Germany’s investment comes at a time of intensified global competition. While countries like the U.S., China, and South Korea are investing €200 billion, €150 billion, and €452 billion respectively, Europe’s efforts appear modest in comparison. Analysts emphasize the need for Europe to prioritize areas like power semiconductors and to enhance local production of chip-making equipment and materials.

This move also follows Intel's recent decision to pause its €30 billion chip plant in Magdeburg, highlighting challenges in attracting and retaining major semiconductor investments. Germany’s subsidy program is viewed as a critical step to maintain competitiveness and resilience in its chip ecosystem