Germany recently announced huge investments in semiconductor production, but still has a long way to go to establish itself in this strategic sector, due to labor shortages and disputes over subsidies.
Taiwan (where 90% of the world’s most advanced semiconductors are produced), South Korea, and China increasingly control the market.
From electric cars to smartphones through wind turbines to rockets, electronic chips are “the oil of the 21st century” components that, in the words of German Chancellor Olaf Scholz during the opening of a new plant for the German manufacturer Infenion in early May, are « everything-dependent ».
Scholz talked about semiconductors with the Koreans during a weekend visit to Seoul, inviting them to invest in Europe to strengthen supply chains.
The EU’s stated goal is to reach 20% of the global market in 2030, double what it is today. For this, it will require four times more production in the old continent.
This is the goal of the European « chip law » reached in April, which provides for the allocation of €43 billion for public and private investment.
Europe’s first economy seeks to lead this movement to reduce dependence on Asia. In addition to the new Infineon plant in Dresden – a project worth €5 billion euros – the US groups Intel and Wolfspeed have announced major investments in Germany in recent months.
Germany will deal a blow if it managed to host the first European factory of Taiwanese group TSMC, one of the world’s largest manufacturers of electronic chips.
Talks have been under way for more than a year to establish a plant in the Dresden region, Europe’s premier microelectronics pole, known as « Silicon Saxony ». A decision is expected in August, according to TSMC.
But about 200 kilometers away in the Magdeburg region in particular, the suspicion of an euphoria triggered by last year’s announcement by US giant Intel ingesting €17 billion, as the construction of the plant, which was due to begin in the first half of 2023, has not yet begun.
The group, which saw a record quarterly loss at the beginning of the year, said in a statement to AFP that « a lot of things have changed » in one year, as it suffered a sharp decline in sales of PCs and smartphones.
In addition to « geopolitical challenges… Turbulence in the global economy has increased costs, from building materials to energy « , Intel explained.
For its part, the German Ministry of Economy states that additional public assistance is expected « to fill the cost gap of the planned project, which has increased significantly. »
For Germany, another major challenge is to find enough workers. According to a study conducted by the German Economic Institute in December, there is currently a shortage of 62,000 qualified employees in various professions within the chip industry.