The board of TSMC is about to give the green light for the construction of a large chip factory in Germany. Our neighboring country has thus suffered a second serious blow.

TSMC today approved the construction of a chip factory in Germany. This is good news for Germany, which is investing billions to boost chip production.

Germany largely ignores a joint and shoddy EU initiative and is banking on its own plan to bring microchips into the country. The Germans are providing 20 billion euros for this. Most of that money has already been committed, and Intel will get most of the pie. Germany is funding the construction of a state-of-the-art Intel site in Magdeburg with 10 billion euros.

Germany has 5 billion euros ready for TSMC. With these grants, the company will build a factory near Dresden. Above all, microcontrollers tailored to the German automotive industry are built at this location. The important auto sector proved vulnerable to chip shortages and dependent on foreign manufacturing. Germany wants to solve that. The total cost of the factory is estimated at 10 billion euros, so the German state, like Intel, will bear half of the costs.

Own national money pot

Germany subsidizes the factory from its own climate and transformation fund. It is striking that the Germans, Intel and TSMC, have brought two important chip manufacturers to their country on their own initiative. Germany is thus orienting itself to a certain extent on the European Chips Act, which also aims to boost chip development and chip production in the EU.

The EU chip law provides for investments of 43 billion euros, which is not much when you consider that Germany alone is providing an additional 20 billion euros. In addition, the 43 billion euros currently only exist on paper and only 3.3 billion euros are actually estimated. The German approach and the results achieved are in stark contrast to the European one.