Infineon chairman Ulrich Schumacher clearly means business in his battle against what he perceives to be Germany's excessively high taxes.
His threat to relocate the headquarters of Europe's second-biggest maker of semiconductors outside Germany is not the empty saber-rattling many observers had first thought it might be.
Infineon has already moved its book-keeping activities to Portugal and recently announced it would also transfer its auto-electronics business to Austria.
Schumacher put the proposal to relocate Infineon's headquarters to his company's supervisory board last week. And while no final decision is imminent, the chairman told the recent interim earnings news conference that concrete proposals for a relocation could well be on the table by the end of the year.
If Infineon does decide to turn its back on Germany, the departure of one of the country's top 30 companies would not only be an embarrassing blow to the government under Chancellor Gerhard Schroeder, it would also dangerously undermine Germany's international reputation and standing as an industrial and manufacturing site.
And that could spark a wave of other corporate defections.
Another IT company, the electronic components maker Epcos, for example, has also publicly stated it is considering moving abroad. Even family-run groups such as the food empire Oetker have hinted they might be thinking about emigrating to sunnier climes.
The companies make no secret about who or what they think is to blame: the relatively high level of taxes in Germany and the government's frequent and confusing U-turns in economic and fiscal policy that make it difficult for firms to plan long-term.
Schumacher reckons Infineon could save hundreds of millions of dollars each year in taxes, money that could be better used for investment in "new technologies and infrastructure."
And Epcos chief Gerhard Pegam said that Germany had "serious problems as an industrial site" given the inability of politicians to push through the necessary structural reforms. Indeed, whoever was not considering moving abroad "could be out of the picture tomorrow," Pegam warned.
A board member of the German BDI industry federation, Ludolf von Wartenberg, said in a newspaper interview last week that he hoped such words would cause German politicians to sit up and listen.
"Perhaps it'll serve as a wake-up call to the footdraggers on reform," he told the business daily Handelsblatt.
The government's second term in office had so far been marred by an unrelenting cacophony in fiscal policy matters and an inability to make any headway on reforms.
Schroeder is currently facing fierce resistance to his reform plans, not only from trade unions, but even from within his own party.
While Infineon says it looking at a number of different possible sites, Schumacher appears to favour a move to Switzerland, where companies pay taxes of eight to 10 percent on profits, compared with 30 percent in Britain, 35 percent in the Netherlands and 40 percent in Germany.
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
TECH WINNERS: Taiwan and South Korea reported robust trade, which suggests that they have critical advantages in the rapidly expanding AI supply chain, an official said Exports last month surged to a new high, as booming demand tied to artificial intelligence (AI) infrastructure fueled shipments of advanced technology components, underscoring the nation’s pivotal role in the global semiconductor supply chain. Outbound shipments climbed to US$80.18 billion, the highest ever for a single month, rising 61.8 percent from a year earlier and marking the 29th consecutive month of growth, the Ministry of Finance said yesterday. “The surge was driven primarily by global investment in AI infrastructure,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) said. The mass production of next-generation AI computing systems has accelerated procurement across the semiconductor supply
RSS