German subsidies or current variables affecting Intel and TSMC's plans to build factories_News_ALL NEW SEMI (ANSC)

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German subsidies or current variables affecting Intel and TSMC's plans to build factories

2023-11-24

Recently, a ruling by the Federal Constitutional Court of Germany resulted in the postponement of the country's 2024 federal budget. All government expenditures may be subject to scrutiny, which could result in chip manufacturers such as Intel and TSMC losing significant subsidies.

It is reported that the European Union is actively promoting the development of the semiconductor industry, attracting multinational chip manufacturers to open factories and research institutions in Europe. The European Union approved the European Chip Act in July this year, and member states have also allocated budgets to attract factories to settle in through subsidies.

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Previously, the German government promised to provide a total of 20 billion euros (approximately 22 billion US dollars) in subsidies to these chip manufacturers, attracting them to build factories in Germany. According to the news, Germany has shelved billions of dollars in subsidies due to issues with the use of funds.

Intel and TSMC had previously promised to invest billions of dollars in German factory projects, but without government subsidies, these costs would have to be borne by Intel and TSMC themselves, undoubtedly leading to a reduction in project size, a slowdown in construction speed, or seeking additional investors.

On November 15th, the German Federal Court ruled that the federal government's use of the 2021 pandemic budget funds as the Climate and Transformation Fund was unconstitutional. This fund, which helps transition to a low-carbon economy, amounted to 60 billion euros, causing the German government's operations to be in crisis due to budget gaps.

The Minister of Economy of Saxony Anhalt, Germany, stated, "When Germany can no longer afford projects like Intel's factory construction, the economic losses will be huge, and so will the image losses."

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