Irregularities in the German budget are delaying its approval and pose a real risk that TSMC and Intel will not receive their promised subsidies on time.

Germany enthusiastically distributed subsidies to convince Intel and TSMC to build megafactories in the country. A total of 22 billion euros in free money was intended to convince chip manufacturers to choose Germany as a location for their European investments. Intel alone would receive ten billion euros. However, this money is subject to the approval of the German budget for 2024.

Unconstitutional cents

That’s where the shoe pinches. The Federal Constitutional Court rejected the allocation of additional funds from the pandemic fund to the climate and transformation fund because this budget shift would be unconstitutional. This calls the entire funding plan into question again. In any case, the money can only be paid out after approval and new voices are being raised that question the huge round of funding.

TSMC and Intel are definitely thinking about money and have also budgeted the construction of their multi-billion dollar factories with money in mind. If this does not flow (in a timely manner), the chip specialists will have to at least temporarily obtain money from elsewhere to finance their projects or consider scaling back their plans.