Munich While Europe is still debating how the domestic semiconductor industry can be strengthened, construction workers in the rest of the world are already moving in to build new chip factories. The industry in Germany and France is therefore sounding the alarm.
“There is an urgent need for a joint European effort to strengthen the semiconductor industry in Europe,” demands Siegfried Russwurm, President of the Federation of German Industries (BDI).
The situation is dramatic, as the former Siemens board member warns. “Due to the acute shortage of chips, the German economy had to cope with a loss in sales of 1.6 percent of German gross domestic product last year,” says Russwurm. That would correspond to more than 50 billion euros lost to companies because of a lack of semiconductors.
There is no improvement in sight, on the contrary: “With the digital and ecological transformation, the global demand for semiconductors will continue to increase massively,” explains Russwurm. In a position paper that is exclusively available to the Handelsblatt, the BDI, together with the French industry associations Medef and France Industrie, are now urgently calling for more speed from politicians. The race to catch up with chips must finally begin if the continent does not want to fall behind.
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Intel is the only large chip company to have announced that it will invest in the EU. The Americans want to build new factories in Magdeburg and Italy. In addition, CEO Pat Gelsinger has announced that he will open research sites in France, Poland and Spain.
>> Read here: intel-Investment in Magdeburg: The friendly alternative to Tesla
Construction work in Magdeburg is scheduled to begin next year. In 2026, the first wafers, as the discs on which chips are called, could leave the factory. The production facilities are expected to cost 17 billion euros.
For the location in Saxony-Anhalt alone, however, the company from Silicon Valley is demanding subsidies of more than five billion euros. The state government in Saxony-Anhalt was recently confident that state aid would be approved in Brussels. However, the financing has not yet been finally clarified.
The financing of the billion-euro project has still not been finally clarified.
(Photo: dpa)
The reason: The negotiations between the EU Parliament and the European Commission on the major European subsidy program for semiconductors, the Chips Act, are not progressing. Commission chief Ursula von der Leyen presented the project at the beginning of the year. Europe is expected to more than double its share of global semiconductor production by 2030 – to 20 percent. For this, the production capacity in the EU has to quadruple.
Negotiations on the Chips Act continue
The law is an industrial policy offensive. The EU wants to use this to make up for Europe’s gap to other regions and reduce dependencies on individual Asian suppliers such as the contract manufacturer TSMC from Taiwan. 43 billion euros in state funds are to be mobilized.
In order to achieve this goal, Brussels wants to interpret the previously strict rules for state aid more liberally. Because the EU Parliament has not yet approved the Chips Act, it is currently completely open whether, when and under what conditions the billions in funding will actually flow.
According to the industry associations, the EU Commission has set the right target in principle. However, according to the BDI and its French partners, it is crucial to release funding quickly and to speed up planning and approval processes. This is the only way Europe can keep up with the chip locations in Asia and America.
Samsung alone is investing 340 billion euros
The example of Samsung shows that Europe has no time to lose. The largest chip manufacturer in the world alone wants to invest around 340 billion euros by 2030 – the majority of it in South Korea. Samsung announced this this week. In addition, the Asians are currently building a new $17 billion factory in Texas. There is not a single one of the ten largest semiconductor producers in the world from Europe.
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In the EU, the subsidies are probably linked to an obligation, as Commission proposals show. Chip producers who have received state aid could therefore be forced to supply European customers first. The EU wants to use this to prepare itself for supply crises. The industry doesn’t like that at all. The associations warn against a planned economy in semiconductors.
The companies also see another problem: Intel will mainly produce chips of the latest generation on the Elbe. The European customer industries, on the other hand, primarily need semiconductors that are produced using more mature technologies. These capacities must also be promoted, the industry associations are demanding.
The electronics association ZVEI is already warning that the Chips Act is not meeting the needs of European customers. “Europe must strengthen its competence in all structural sizes,” says Managing Director Wolfgang Weber. “Power electronics and sensors are also crucial for the success of the green and digital transformation.”
The European chip companies are leaders in these fields. Corporations such as Bosch, Infineon, NXP and STMicroelectronics produce advanced chips, but not with the most expensive and complex processes, as Intel plans. However, the industry believes that these factories should also be funded.
According to the EU draft, “innovative systems” are eligible for funding. A wording that should be interpreted as broadly as possible in the interests of European industry. The economics ministers of Bavaria and Baden-Württemberg recently called for this: “We mustn’t just focus on high-performance chips with the smallest structure sizes.”
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