German economy ministry hails €10bln chip investment as key for energy transition

A 10 billion euro investment in semiconductor chip production in eastern Germany will secure the country’s emission reduction efforts, according to the government. “Semiconductors keep our world running and make the transformation towards climate neutrality possible in the first place,” Green economy minister Robert Habeck said in reaction to the decision to build a chipmaking plant near Dresden, taken by leading Taiwanese chipmaker TSMC, in partnership with German engineering and technology company Bosch, German chipmaker Infineon and Dutch chipmaker NXP. “Without [chips], no computer works, no car drives, and neither wind nor solar plants can produce energy. TSMC's investment will therefore make a substantial contribution to securing the supply of semiconductor chips for Germany and Europe," Habeck emphasised. He added a “robust” semiconductor production operation in Germany is of particular importance for the country’s global competitiveness in manufacturing. The government supports the investment with subsidies totalling around 5 billion euros.

TSMC’s investment follows a string of other subsidised high-profile investments in the east of the country, ranging from Tesla’s first European factory to TSMC’s US rival Intel earlier this year. The relatively plentiful supply of renewable power in the region was an important factor in some of these investments, and experts have said TSMC and other Taiwanese chipmakers will have to shift production increasingly to locations beyond the Asian island to meet the rising demand for climate-friendly components.