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Recently, in the northern region of Dresden, TSMC CEO Wei Zhejia, German Chancellor Olaf Schulz, European Commission President Ursula von der Leyen and Saxony Governor Michael Kretschmer and other important figures gathered at an industrial park in the Klotzsche district to attend an important event. This is the groundbreaking ceremony for a modern chip factory, which will be led by TSMC, Bosch, Infineon and NXP under the name of European Semiconductor Manufacturing Company (ESMC).Its goal is to supply products primarily to the automotive industry.

The European Commission was pleased with the progress and approved a 5 billion euro subsidy to the German government to support the ESMC project.The companies involved in the project will also contribute €5 billion. The plant is expected to start operating in 2027 and will create around 2,000 jobs. Establishing semiconductor manufacturing in Europe is a strategic effort to minimize dependence on the continent.

TSMC's Dresden plant is just the beginning of such a project, with the project officially announced a year before the groundbreaking ceremony - a reasonable progress compared to other announced chip factories that have made slower progress.

Intel's Financial Woes

The most important investment plan is in Magdeburg, where Intel plans to invest 30 billion euros in two new factories, about a third of which will come from the government.However, EU approval for this has still not been granted. In addition, Intel's business operations are far from optimal. Intel CEO Pat Gelsinger recently announced a multi-billion dollar cost-saving plan, resulting in the loss of approximately 15,000 jobs worldwide and a reduction in investment of more than 20%.

There are concerns that this could also affect the Magdeburg project. However, the Saxony-Anhalt government has publicly denied this, while Intel has not yet made any official statement.Nonetheless, Kissinger has internally pledged to invest in projects including Magdeburg.

The project was announced in 2022 and was originally scheduled to start in the first half of 2023, but was delayed to the end of 2024. Currently, development work on a road is underway. Production is scheduled to start in 2027.

Wolfspeed is slow

US company Wolfspeed specialises in silicon carbide power semiconductors, which are essential for growth industries such as photovoltaics and electric vehicles.The company plans to work with automotive supplier ZF in the Saarland city of Ensdorf. The investment was announced at the beginning of 2023, but construction was scheduled to start in the first half of the previous year - a delay that now puts the excavator off until 2025.

One of the main reasons is that Wolfspeed's business development is in trouble, and activist investor Jana Partners is reportedly pressuring the company's management to reevaluate certain investment projects, including one in Saarland.

The dismantling of the coal-fired power plant in Ensdorf, Saarland, was completed at the end of June and is currently underway. The investment in the plant construction currently stands at EUR 2.7 billion, of which EUR 700 million came from state funds.The factory will begin production in 2027 and is expected to create hundreds of jobs.

Infineon Technologies is moving forward steadily

German semiconductor specialist Infineon Technologies plans to invest 5 billion euros in an expansion near TSMC's plant in Dresden, creating 1,000 new jobs. 1 billion euros of this will be provided in the form of subsidies. CEO Jochen Hanebeck said the project is "on track".In a recent interview with the Süddeutsche Zeitung, Hanebeck announced that the equipment should be delivered within a year and production should start in 2026. The groundbreaking ceremony for the project will take place in 2023.

The project was originally scheduled to start in the first half of 2023, but was later postponed to the end of 2024. Currently, road access work is underway. The planned start of production is 2027.

But Infineon also faced falling profits and launched a cost-saving plan that led to 2,800 layoffs in Europe, while its Malaysian factory also sparked controversy.