A German government budget impasse that threatened to hold up construction subsidies for chipmakers TSMC and Intel was resolved Wednesday, following a month of negotiations. German officials confirmed that the subsidies for the two companies to build new semiconductor factories, known as fabs, in the country will move ahead as planned.
On November 15, the German Federal Constitutional Court ruled that it was unconstitutional to divert unused money from a COVID-19 response fund into the Climate and Transformation Fund, which included the subsidies for TSMC and Intel. However, after a month of intensive negotiations, the three parties in Germany's coalition government finally reached an agreement.
Michael Kellner, Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Climate Action, confirmed that the fab subsidies would remain unchanged. In an interview with the German News Agency (DPA), Kellner said that these investments can ensure future economic strength and that the entire country will benefit.
Martin Dulig is the economic minister of Saxony, the German state where TSMC’s new fabs will be located. He says he is very happy with the federal government's decision, and that TSMC's new fabs could reduce Saxony’s and Europe’s dependence on Asian and American manufacturing.
TSMC plans to establish its first production base in Europe in the city of Dresden with an investment of more than 10 billion euros. The German government plans to provide subsidies of 5 billion euros for that project. Intel plans to invest 30 billion euros for a fab in Magdeburg, which is expected to receive 9.9 billion euros in subsidies.