Germany ready to help Europe invest ‘billions’ in chip manufacturing

Germany ready to help Europe invest ‘billions’ in chip manufacturing

Business news |
By Peter Clarke

In a Handelsblatt report Economy Minister Peter Altmaier said he is talking to his opposite numbers in France and the European Commission and that state aid could be provided under a so-called Important Project of Common European Interest (IPCEI).

“I assume that in all countries that are ready to take part in this IPCEI … that we’ll clearly get together a double-digit billion euros amount – and not in the lower range but rather in the middle range,” Altmaier was reported saying by Reuters, in a virtual discussion with the other politicians. “If this will be 50 billion euros at the end or if it’s going more into the direction of 20 billion euros, that’s beyond my predictions.” State subsidies would be expected to amount to 20 to 40 percent of the total.

The idea of an IPCEI to bolster European chip manufacturing also meshes with a multinational initiative launched in December 2020 (see Europe will try to rebuild semiconductor capability using pandemic recovery funds).

Meanwhile supply chain problems in the automotive sector forced Altmaier to write to his opposite number in Taiwan asking for foundry chipmakers to increase their output of automotive ICs because German carmakers were unable to produce vehicles (see Germany asks TSMC to prioritize automotive chips). In the article Altmaier says he sees a dangerous dependence on foreign chip companies and he calls for European industry to draw up investment plans.

The urgency of the situation means that interested companies have been given until early March to submit investment plans, the Handelsblatt and Reuters articles said referencing unnamed sources. Reuters’ account said the deadline is March 1.

The Handelsblatt article quotes Altmaier saying in translation: “Our companies need secure supply chains and a powerful and broad-based microelectronics industry with patents, developments and production facilities in Germany and the EU.”

Infineon Technologies in Munich and Globalfoundries in Dresden have both been reported welcoming the initiative although they no longer manufacture at the leading-edge of miniaturization having preferred to focus on either specialized processes for power semiconductors, so-called More-than-Moore manufacturing processes or processes behind the leading-edge.

However, Altmaier said he is talking with Bruno Le Maire, France’s Minister of Economy, Finance and Recovery, and with European Union internal market commissioner Thierry Breton about how they can persuade the European semiconductor industry to invest in strategic areas such as chips for communications and processors and memories for radio networks.

Next: Altmaier says be bold

That would represent a massive change in direction for Europe’s semiconductor sector, one that has been hinted at in a multi-country initiative launched in December 2020 (see Europe will try to rebuild semiconductor capability using pandemic recovery funds). However, the idea of a European chipmaker entering the memory field would represent a re-engagement after a couple of decades absence.

“I call on companies to make bold and forward-looking investment decisions in order to position Europe strongly in future technologies such as 5G, 6G and Open RAN,” the article quoted Altmaier saying in translation.

In 2018 the European Commission approved a first IPCEI in the microelectronics sector after the idea had been in play for almost five years.  The plan was tendered jointly by France, Germany, Italy and Germany and meant that public authorities will be able to provide up to €1.75 billion (about $2 billion) to support research, innovation and manufacturing and covered about 40 sub-projects with a time-scale that continues to 2024.

Related links and articles:

Handelsblatt article

Reuters article

News articles:

Germany asks TSMC to prioritize automotive chips

Europe will try to rebuild semiconductor capability using pandemic recovery funds

Germany pushes for more semiconductor independence from US, China

Volkswagen faces massive chip shortages

Low-cost European FPGA launched with IPCEI support

IPCEI fails to address European dithering

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