TSMC and Intel both had plans to establish manufacturing facilities in Germany, supported by financing from the European Union under the European Chips Act passed in July. Germany had pledged around $22 billion in incentives for chip manufacturers like Intel and TSMC, earmarked for building factories in the country. However, things have not gone as expected.
Intel and TSMC Facing Million-Dollar Losses Due to Germany
According to a report from ComputerBase, the funds from Germany have not yet received approval from authorities. As a result, the creation of these factories is currently on hold, impacting the future economies of both TSMC and Intel, along with other manufacturers with intentions to build new chip facilities.
If the situation persists, manufacturers such as Intel and TSMC may find themselves compelled to invest their own funds to proceed with these factories—funds that were not initially budgeted.
The German government had considered using the Climate and Transformation Fund to subsidize chip manufacturing. Now, with this option unavailable, the ruling coalition has postponed final debates and approval of this budget, causing significant challenges for chip manufacturers looking to expand in the country.
We are yet to know when this funding will be approved, creating an uncertain outlook until all subsidies are reviewed. This may lead to delays, alterations in financial figures, or even the non-approval of these subsidies.
Furthermore, the German government’s consideration of utilizing the Climate and Transformation Fund to subsidize chip manufacturing has hit a roadblock. The inability to proceed with this funding has led to the postponement of final debates and approval of the budget. This situation is causing genuine concerns for chip manufacturers like Intel and TSMC, who had anticipated leveraging these funds for their expansion plans. The delay in budgetary approval introduces an additional layer of uncertainty, potentially affecting the timelines and strategic decisions of these tech giants as they navigate the intricate landscape of semiconductor manufacturing.