The subsidies are expected to total about €2 billion, according to a report by Bloomberg citing two people who attended an official event about the funding plans in late November, and who asked not to be identified .A spokesperson for the ministry said the sum would be in the “low single-digit billion euro range” in response to a query from Bloomberg News, declining to be more specific.
The new funds will be provided to chip companies to develop “modern production capacities that significantly exceed the current state of the art,” Annika Einhorn, from the German economic ministry, said in a statement.
In November, the German Economy Ministry published a call for chips companies to apply for new subsidies for projects that contribute to a strong and sustainable microelectronics ecosystem in Germany and Europe, following the European Chips Act (ECA). “The funded projects should contribute to a strong and sustainable microelectronics ecosystem in Germany and Europe,” Einhorn told Bloomberg.
Passed in 2023, the European Chips Act aims to strengthen the EU’s semiconductor ecosystem and double the bloc‘s market share to 20% of global production capacity by 2030.
Industry response
Commenting on the news, Dunstan Power, Director of electronics design consultancy ByteSnap Design, said:
“This EUR 2 billion investment from the German government is a step in the right direction towards bolstering Europe‘s semiconductor industry. We must be realistic about the scale of the challenge, however. The investment is relatively small against the value of semiconductor companies and the cost of constructing wafer fabs. Nevertheless, it‘s encouraging to see such a commitment to reducing our reliance on Asian chip manufacturers and ensuring a more robust supply chain.
“As an electronics design consultancy, we‘ve seen first-hand how chip shortages can impact product development timelines in recent years. This latest move could eventually lead to more predictable lead times and potentially foster innovation in chip design and manufacturing right here in Europe. It‘s a promising development for companies like ByteSnap and our clients who benefit on a steady supply of advanced microprocessors.”
