In Dresden, the Taiwanese semiconductor factory TSMC is being generously subsidized by the German government. Three European tech companies are also involved.
Neither Chancellor Scholz (SPD), Ursula von der Leyen nor Prime Minister Kretschmer wanted to miss the groundbreaking ceremony with the head of TSMC Photo: Axel Schmidt/reuters
LEIPZIG taz | The laying of the foundation stone on Tuesday in Dresden marks one of the largest investments in Saxony to date: ten billion euros for the location of a chip factory, half of which is being paid for by the federal government. Political celebrities wanted to be in the photo. With red spades, Federal Chancellor Olaf Scholz (SPD), EU Commission President Ursula von der Leyen and Saxony’s Prime Minister Michael Kretschmer (both CDU) dug into the piled up sand together with CC Wei, the head of the Taiwanese chip manufacturer TSMC.
The Saxon state capital is not just going to build any old large semiconductor factory. A joint economic project is planned under the title ESMC – in English “European Society for Semiconductor Manufacturing”. The project will produce microchips that are used in smartphones, computers and cars. The German technology group Bosch and the three semiconductor manufacturers Infineon from Germany, NXP Semiconductors from the Netherlands and TSMC from Taiwan are involved.
Production in the new plant is scheduled to start at the end of 2027 and will create at least 2,000 new jobs. The lobby group Silicon Saxony, which advocates for electronics companies in the Dresden, Freiberg and Chemnitz area, hopes that in addition to the 2,000 jobs in the new factory, suppliers will also be able to create more work. The ESMC project is expected to create 8,000 new jobs. TSMC is the world’s largest contract manufacturer for semiconductors. The Dresden site will be the first in Europe for TSMC, which has previously produced in China and Taiwan. The location is part of the federal government’s semiconductor strategy.
In return, the traffic light coalition promised the companies five billion euros in state aid. Just in time for the laying of the foundation stone, the EU Commission also announced on Tuesday that it was approving the federal government’s aid. EU Commission President Ursula von der Leyen said at the groundbreaking ceremony that cooperation between young start-ups and global corporations can already be observed in Saxony. “More than 2,500 companies in the chip industry are based here in the region.”
Is Intel shaky in Magdeburg?
However, the US chip manufacturer Globalfounderies criticized the subsidy last week. Handelsblatt It is cited that the subsidy for an industry leader is unfair compared to other factories. This distorts competition.
Chancellor Olaf Scholz defended the investment at the groundbreaking ceremony. According to the AFP news agency, he said that Germany and Europe should not be dependent on “other regions of the world” when it comes to future technologies. Saxony’s Economics Minister Martin Dulig (SPD) also hopes that the plant’s new jobs will attract “skilled workers from all over the world to Saxony.”
And the TSMC factory in Dresden is not the only future chip location in eastern Germany. In Saxony-Anhalt, near Magdeburg, the US company Intel is currently planning to build several chip factories for around 30 billion euros. The traffic light coalition wants to support this with 9.9 billion euros. However, EU approval is still pending. There are also several reports that the project is shaky.
Intel is now on a cost-cutting course. The company’s shares plummeted at the beginning of the month after Intel announced that it expected losses in the next few years. Cuts are intended to bring investors back.
Will this also affect the factory construction in Saxony-Anhalt? According to the state government in Magdeburg, not – as the news magazine Spiegel However, as reported, there are indications that the party is preparing for a possible failure. This was revealed by an inquiry by the Left Party in the state parliament.
The factories also need a lot of water and energy. But in Dresden, environmental protection took a back seat at the ceremonial groundbreaking. Saxony’s Environment Minister Wolfram Günther (Greens) pointed out the high demands on the factory’s supply and disposal, but said that these were “points that we will solve well together.” Who “we” is remains to be seen. A new state parliament will be elected in Saxony in two weeks, and it is still unclear which parties will govern the state after that.
