(Bloomberg) — Infineon Technologies AG gathered European powerbrokers at the ground-breaking ceremony for a new semiconductor fab in Dresden, Germany as its chief executive called for more cooperation among allies amid a flood of competing subsidies announced by the US and EU.
(Bloomberg) — Infineon Technologies AG gathered European powerbrokers at the ground-breaking ceremony for a new semiconductor fab in Dresden, Germany as its chief executive called for more cooperation among allies amid a flood of competing subsidies announced by the US and EU.
Infineon Chief Executive Officer Jochen Hanebeck hosted German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen at the site of what will be the company’s most expensive facility when it starts production in 2026.
The project is seeking to tap funds under the European Union’s €43 billion ($47 billion) Chips Act as the bloc attempts to double its share of global semiconductor output to 20% by 2030. The EU’s program was announced in April in response to President Joe Biden’s plan to promote domestic chip production, which has been criticized by allies in Europe and Asia as risking a subsidies arms race.
“I would appreciate some alignment in the liberal democratic world on the chips act,” Hanebeck told Bloomberg TV on Tuesday. “No country will achieve self-sufficiency. It’s all about reducing one-sided dependencies.”
Scholz hailed Infineon’s decision to invest into the factory as an important signal for Germany as it tries to cut its exposure to China, its biggest trade partner, by reducing its dependencies while avoiding an immediate rupture in business ties.
Infineon plans to invest €5 billion in the project and is applying for around €1 billion in public funding.
Read more: Biden’s Made-in-America Push Sparks Global Subsidies Arms Race
Congress last year approved funding of around $420 billion to incentivize the domestic production of chips and clean-energy technologies as Washington seeks to undermine Chinese technological advances. The subsidies have led to European companies from Swedish battery maker Northvolt AB to Germany’s Volkswagen AG to look to the US over their home markets for new factories.
The European plan has also attracted new commitments. In addition to Infineon, Intel Corp., GlobalFoundries Inc. and STMicroelectronics NV have announced plans to build production facilities in the bloc.
“What has long been far from a priority is the mass production of semiconductors, without which everything will ultimately grind to a halt,” Von der Leyen said at the event. She said that Europe is still too dependent on chips from Taiwan and South Korea, “a region in which tensions can flare up at any time.”
–With assistance from Michael Nienaber.
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