Germany ready to help Europe invest 'billions' in chip manufacturing

February 04, 2021 // By Peter Clarke
Germany ready to help Europe invest 'billions' in chip manufacturing
Germany's economy minister has said he wants the chip industry to draw up plans to invest approaching €50 billion in European manufacturing and that the German state is prepared to provide €1 billion.

In a Handelsblatt report Economy Minister Peter Altmaier said he is talking to his opposite numbers in France and the European Commission and that state aid could be provided under a so-called Important Project of Common European Interest (IPCEI).

"I assume that in all countries that are ready to take part in this IPCEI ... that we’ll clearly get together a double-digit billion euros amount - and not in the lower range but rather in the middle range," Altmaier was reported saying by Reuters, in a virtual discussion with the other politicians. "If this will be 50 billion euros at the end or if it’s going more into the direction of 20 billion euros, that’s beyond my predictions." State subsidies would be expected to amount to 20 to 40 percent of the total.

The idea of an IPCEI to bolster European chip manufacturing also meshes with a multinational initiative launched in December 2020 (see Europe will try to rebuild semiconductor capability using pandemic recovery funds).

Meanwhile supply chain problems in the automotive sector forced Altmaier to write to his opposite number in Taiwan asking for foundry chipmakers to increase their output of automotive ICs because German carmakers were unable to produce vehicles (see Germany asks TSMC to prioritize automotive chips). In the article Altmaier says he sees a dangerous dependence on foreign chip companies and he calls for European industry to draw up investment plans.

The urgency of the situation means that interested companies have been given until early March to submit investment plans, the Handelsblatt and Reuters articles said referencing unnamed sources. Reuters' account said the deadline is March 1.

The Handelsblatt article quotes Altmaier saying in translation: "Our companies need secure supply chains and a powerful and broad-based microelectronics industry with patents, developments and production facilities in Germany and the EU."

Infineon Technologies in Munich and Globalfoundries in Dresden have both been reported welcoming the initiative although they no longer manufacture at the leading-edge of miniaturization having preferred to focus on either specialized processes for power semiconductors, so-called More-than-Moore manufacturing processes or processes behind the leading-edge.

However, Altmaier said he is talking with Bruno Le Maire, France's Minister of Economy, Finance and Recovery, and with European Union internal market commissioner Thierry Breton about how they can persuade the European semiconductor industry to invest in strategic areas such as chips for communications and processors and memories for radio networks.

Next: Altmaier says be bold

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