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Germany Reportedly Plans to Dole Out €20 Billion to Bolster Semiconductor Manufacturing

The government of German Chancellor Olaf Scholz, according to media reports, intends to provide financing for 20 billion euros for the development of semiconductor production in this country.

Germany Reportedly Plans to Dole Out €20 Billion to Bolster Semiconductor Manufacturing

This material initiative of the German leadership is an effort within the framework of a broader concept of strengthening the country’s technological sphere and ensuring the supply of critical components during a period of geopolitical tension, which so far does not tend to decline and subsequent improvement of the situation in the space of international relations.

The media, citing insiders, report that the financing will be distributed between German and international companies by 2027. There is also information that the money will be allocated from the Climate and Transformation Fund. This organization was created as a structure for investing in the implementation of the decarbonization process of the economy. Over time, the scope of the fund’s activities has been expanded. This was due to the desire of the German leadership to take more control and limit within certain limits government spending, which has a systematic nature.

Media sources familiar with the details of the negotiation process in the German government reported that the amount of funding is currently being discussed, which will be announced in the coming weeks. The German Ministries of Finance and Economy did not provide any comments in response to a request from journalists about investing in the technology sector.

It was officially confirmed that the German government has already approved the provision of financing for 10 billion euros for the construction of a new Intel plant. The allocation of 7 billion euro subsidies to companies such as Taiwan Semiconductor Manufacturing and local Infineon Technologies AG is also currently being agreed upon.

The intentions and actions of the German government concerning the technology sector indicate that the country’s leadership is beginning to realize the significant degree of dependence of the European economy on supplies from Asia, which were disrupted initially by the coronavirus pandemic, and then by geopolitical tensions. Earlier in July, official Berlin, commenting on its strategy of relations with China, announced plans to reduce dependence on this country by diversifying and attracting future technologies, such as semiconductors.

German manufacturers of cars and other products during the coronavirus pandemic tried to arrange the supply of chips. This situation has exacerbated the supply problem and has become a kind of starting point in realizing the need to establish local semiconductor production. Also, the issue of dependence was actualized against the background of the trade confrontation between China and the United States.

As we have reported earlier, EU Approves €8 Billion State Subsidies for Chip Research.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.