German Economy Minister Katherina Reiche said on Monday that Germany and Europe must strengthen their position in the global chip market.
During a visit to the construction site of Infineon’s new factory in Dresden, the conservative politician said semiconductor manufacturing is key to Germany’s economic resilience and its competitiveness as a business location.
The EU currently accounts for approximately 8% of global semiconductor production, while its demand stands at 20%. “That means we have to catch up,” she said.
Infineon is building a new chip facility in Dresden with €1 billion ($1.1 billion) in funding from the federal government. According to the German company, the total cost of the project will be €5 billion. Production is scheduled to begin in the second half of 2026.
The plant will produce semiconductors designed to support decarbonization and digitalization, with planned applications in the automotive sector and renewable energy systems.
Reiche said the federal government is supporting the technology to help Germany achieve greater strategic independence. She noted that future funding efforts would focus on research and development.
Reiche also criticized the previous government in light of US chipmaker Intel’s withdrawal from a multibillion-dollar investment in Magdeburg. She said that allocating billions in public funds to individual projects must be carefully evaluated.
Taiwanese semiconductor giant TSMC is planning to build a new factory near Infineon’s Dresden site. That project is also receiving support from the German government.