German Chancellor Olaf Scholz and German Minister for Economic Affairs and Climate Action Robert Habeck have promised to solve investment subsidy issues for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Intel Corp, despite the country’s budget woes.
Uncertainty over the funding to TSMC and Intel has arisen after a ruling by the German Federal Constitutional Court, which cast doubt over subsidies for construction of local semiconductor chip plants.
On Nov. 15, the court ruled that the German government’s decision last year to reallocate 60 billion euros (US$65.74 billion) of unused funding from COVID-19 pandemic support measures to its Climate and Transformation Fund was unconstitutional.
Photo: Reuters
Some of the money was designated to go to subsidies in support of investments by companies such as TSMC and Intel in Germany.
The ruling has raised questions over whether the federal government would be able to deliver on its subsidy promises.
TSMC, the world’s largest contract chipmaker, is planning to set up a joint venture to build a semiconductor fab in Dresden, Saxony.
It would have a 70 percent stake in the joint venture, called European Semiconductor Manufacturing Co, with investment partners Bosch GmbH, Infineon Technologies AG and NXP Semiconductors NV expected to each hold a 10 percent stake.
US chip giant Intel is planning to build a wafer fab in Magdeburg, Saxony-Anhalt.
Berlin has promised 5 billion euros in subsidies to TSMC, which with its partners is expected to invest a total of 10 billion euros in the new plant, while Intel has been promised 9.9 billion euros for its 30 billion euro investment.
Saxony-Anhalt Minister President Reiner Haseloff on Monday said that Scholz spoke by telephone with him and Saxony Minister President Michael Kretschmer to express his strong support for the TSMC and Intel projects, and pledged to do his best to bring them to fruition.
“We have faith in the chancellor’s promises,” Haseloff said.
Habeck said that he would try hard to find a solution to provide funding under the law to TSMC and Intel after he met with the state leaders.
Habeck said that the investments are “the core of Germany’s economy” and there is no doubt that they need to be realized.
TSMC is hoping to break ground on the fab in Dresden in the second half of next year. Mass production would start at the end of 2027 and use 12, 16, 22 and 28-nanometer processes to produce chips for automotive electronics and specialty industrial devices.
The plant would be TSMC’s first chip foundry in Europe.
The chipmaker is also building two fabs in Arizona and another in Kumamoto, Japan.
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The number of Taiwanese working in the US rose to a record high of 137,000 last year, driven largely by Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) rapid overseas expansion, according to government data released yesterday. A total of 666,000 Taiwanese nationals were employed abroad last year, an increase of 45,000 from 2023 and the highest level since the COVID-19 pandemic, data from the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed. Overseas employment had steadily increased between 2009 and 2019, peaking at 739,000, before plunging to 319,000 in 2021 amid US-China trade tensions, global supply chain shifts, reshoring by Taiwanese companies and
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) received about NT$147 billion (US$4.71 billion) in subsidies from the US, Japanese, German and Chinese governments over the past two years for its global expansion. Financial data compiled by the world’s largest contract chipmaker showed the company secured NT$4.77 billion in subsidies from the governments in the third quarter, bringing the total for the first three quarters of the year to about NT$71.9 billion. Along with the NT$75.16 billion in financial aid TSMC received last year, the chipmaker obtained NT$147 billion in subsidies in almost two years, the data showed. The subsidies received by its subsidiaries —
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