German Chancellor Olaf Scholz and German Minister for Economic Affairs and Climate Action Robert Habeck have promised to solve investment subsidy issues for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Intel Corp, despite the country’s budget woes.
Uncertainty over the funding to TSMC and Intel has arisen after a ruling by the German Federal Constitutional Court, which cast doubt over subsidies for construction of local semiconductor chip plants.
On Nov. 15, the court ruled that the German government’s decision last year to reallocate 60 billion euros (US$65.74 billion) of unused funding from COVID-19 pandemic support measures to its Climate and Transformation Fund was unconstitutional.
Photo: Reuters
Some of the money was designated to go to subsidies in support of investments by companies such as TSMC and Intel in Germany.
The ruling has raised questions over whether the federal government would be able to deliver on its subsidy promises.
TSMC, the world’s largest contract chipmaker, is planning to set up a joint venture to build a semiconductor fab in Dresden, Saxony.
It would have a 70 percent stake in the joint venture, called European Semiconductor Manufacturing Co, with investment partners Bosch GmbH, Infineon Technologies AG and NXP Semiconductors NV expected to each hold a 10 percent stake.
US chip giant Intel is planning to build a wafer fab in Magdeburg, Saxony-Anhalt.
Berlin has promised 5 billion euros in subsidies to TSMC, which with its partners is expected to invest a total of 10 billion euros in the new plant, while Intel has been promised 9.9 billion euros for its 30 billion euro investment.
Saxony-Anhalt Minister President Reiner Haseloff on Monday said that Scholz spoke by telephone with him and Saxony Minister President Michael Kretschmer to express his strong support for the TSMC and Intel projects, and pledged to do his best to bring them to fruition.
“We have faith in the chancellor’s promises,” Haseloff said.
Habeck said that he would try hard to find a solution to provide funding under the law to TSMC and Intel after he met with the state leaders.
Habeck said that the investments are “the core of Germany’s economy” and there is no doubt that they need to be realized.
TSMC is hoping to break ground on the fab in Dresden in the second half of next year. Mass production would start at the end of 2027 and use 12, 16, 22 and 28-nanometer processes to produce chips for automotive electronics and specialty industrial devices.
The plant would be TSMC’s first chip foundry in Europe.
The chipmaker is also building two fabs in Arizona and another in Kumamoto, Japan.
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of
RSS