Chancellor Olaf Scholz's government plans to allocate €20 billion to support Germany's semiconductor manufacturing to bolster the country's technology sector and ensure the supply of critical components amid rising geopolitical tensions.
The money is planned to be distributed between German and international companies by 2027, and the source is the Climate and Transformation Fund.
“A draft economic plan for 2024 and a financial plan until 2027 for the Climate and Transformation Fund are currently being prepared,” the Treasury Department said in a response to Bloomberg. "This process is not yet complete."
European countries have been forced to attract investment amid economic uncertainty, persistent inflation and the impact of the US Inflation Reduction Act. The German government has already agreed a €10 billion bailout for Intel Corp.'s new plant. and is in the process of negotiating additional subsidies of approximately €7 billion to companies including Taiwan Semiconductor Manufacturing Co. and German Infineon Technologies AG.
The chip support plan means at least €3 billion is available for additional projects. This could benefit other companies operating in Germany. GlobalFoundries Inc. has a significant presence in Dresden, and the German supplier Robert Bosch GmbH also operates a chip manufacturing plant in the city.