US chip giant GlobalFoundries wants huge German subsidies

Philippine Tribune
Philippine Tribune

FRANKFURT, Germany: US chip giant GlobalFoundries wants 4 billion euros ($4.2 billion) in subsidies from Berlin for a massive expansion of a German plant after rivals received government support, a report said on Thursday.

Germany is racing to boost semiconductor production, part of a European drive to reduce reliance on chips from Asia, and manufacturers have announced a series of new projects there in recent months.

Taiwan’s TSMC and Intel from the United States both received hefty government subsidies for their projects ― and now GlobalFoundries is seeking the same.

It wants to invest 8 billion euros to double the capacity of its plant in the eastern German city of Dresden, Chief Executive Officer Thomas Caulfield told German business daily Handelsblatt.

But it is seeking the same level of government support afforded to TSMC, which is reportedly having around half the cost of a 10-billion-euro factory covered by Berlin.

“We are confident that the government does not want to distort the market,” Caulfield told the newspaper, adding that if a profitable company like TSMC is subsidized, then the same must be possible for competitors.

A spokesman confirmed to Agence France-Presse (AFP) the company planned to expand its Dresden site “when market conditions are favorable.”

The report said talks were underway with the German government, although they were not far advanced.

GlobalFoundries has previously spoken out about the impact of subsidies handed to TSMC in Germany.

Saam Azar, responsible for government and legal affairs at the US company, recently told news magazine Der Spiegel that the Taiwanese firm is “more than 10 times our size, now wants to produce semiconductors in our neighborhood that compete directly with our products.”

To do so, it wants to “dig deep into the subsidy pot,” he added.

Chips are crucial in powering everything from microwaves to fighter jets.

But there has been criticism of the government support handed to manufacturers to bring their business to Germany, particularly the nearly 10 billion euros that Intel is receiving to set up its 30-billion plant.

Some have also argued that manufacturers will struggle in Germany due to hurdles ranging from a lack of skilled workers to sky-high energy costs.

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