Germany wants to invite chip manufacturers to local production, offers 14 billion euros in state aid

The German government aims to attract chipmakers with EUR 14 billion (about Rs become a massive problem.

A global chip shortage and supply chain bottlenecks have wreaked havoc for automakers, healthcare providers, telecom operators, and others.

“That’s a lot of money,” Habeck said at a gathering of family businesses in Hanover.

In February, the European Commission presented plans to boost chip manufacturing in the European Union in response to a demand boom and proposed new legislation to relax state aid rules for chip factories.

In March, the US chip manufacturer Intel announced that it was planning to use the German city of Magdeburg as the location for a huge new chip manufacturing complex worth 17 billion euros.

Habeck said there will be more examples like Magdeburg, even if companies in Germany remain dependent on producers elsewhere for components like batteries.

“We have to develop our own strategy to secure primary materials,” he said.

The US chipmaker is spreading its investments in Europe across half a dozen countries, including strengthening its existing factory in Ireland, establishing a design and research facility in France and a packaging and assembly site in Italy.

The initial expenditure totals EUR 33 billion (approx. Rs. 2,76,294 crore), including EUR 17 billion (approx. Rs. 1,42,337 crore) in Germany, where the auto industry is likely to be a major customer for advanced Chips will be as small as 2 nanometers could use the technology.

Highlighting the pain caused by the chip shortage, German automaker Volkswagen on Tuesday said it sold 2 million fewer cars than planned last year because of the problem.

© Thomson Reuters 2022 Germany wants to invite chip manufacturers to local production, offers 14 billion euros in state aid

Ryan Sederquist

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