It was August 20 in Dresden, Saxony, the German bastion of microelectronics. Chancellor Olaf Scholz, although not accustomed to displays of joy, did not shy away from his joy. A prestigious delegation had travelled to lay the foundation stone for a new giant chip factory. Along with the newly re-elected President of the European Commission, Ursula von der Leyen, Che-Chia Wei, head of TSMC, the world’s leading semiconductor manufacturer, had come specially from Taiwan.
The Asian giant has joined forces with Germany’s Bosch and Infineon, as well as the Dutch NXP, within the joint venture European Semiconductor Manufacturing Company (ESMC) for the construction of the factory. The site is to supply chips to the local automotive industry from 2027: 2,000 jobs are to be created.
The 10 billion euro investment was made possible by the generosity of Berlin, which provided no less than 5 billion euros in subsidies for the project. For Olaf Scholz, the visit to Dresden offered a rare opportunity to justify the merits of his policy in favour of this cutting-edge industry, in a bleak political and economic context.
Berlin, which has earmarked €20 billion to attract the world’s leading semiconductor manufacturers to Germany, sees itself as a big winner from the Chip Act launched by Brussels in 2022. This programme mobilises €43 billion to double Europe’s weight in the global market for electronic chip production by 2030. This is the European response to the global race for subsidies currently taking place in the world’s major regions in the microelectronics sector, which is considered to be of strategic importance for the future.
Market change
However, on the other side of the Rhine, in a context of market crisis, doubts are gradually emerging about the reality of the announced implementation projects and the relevance of the subsidies. In Magdeburg (Saxony-Anhalt) and Ensdorf (Saarland), two factory projects launched with great fanfare in 2022 and 2023 are currently at a standstill.
The American group Intel, which supports Magdeburg, is stuck in the crisis. Cornered, its boss, Pat Gelsinger, announced at the beginning of August a global austerity plan that provides for the elimination of 15,000 jobs and a 20% reduction in its investment projects. If the Magdeburg factory has not yet been mentioned, there are doubts about the future of the project valued at 30 billion euros, of which 10 billion must be financed by Berlin… on condition that the subsidy is approved by Brussels.
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