Less than six months after announcing the project, German semiconductor manufacturer Infineon has started construction on its new €5 billion production facility in Dresden.
Ursula von der Leyen, president of the European Commission, praised the project as a "major step forward" towards the bloc's objective of increasing its market share in semiconductors when speaking at the groundbreaking ceremony yesterday.
Europe is currently working hard to lessen its dependency on semiconductor chip imports from countries like China, Taiwan, and South Korea. Von der Leyen alluded to the ongoing hostilities between Beijing and Taipei by saying, "These are regions where tensions can flare up at any time." "Europe's robust industrial base and our internal market would be severely impacted by even the smallest trade disruption."
The EU is hoping that increasing domestic chip production would help alleviate the supply issues that have plagued several of the region's key tech industries over the past two years. Chips are crucial components in everything from vehicles to cell phones.
The EU is mobilizing €43 billion under the EU Chips Act, which was approved last month, to increase its market share in semiconductors from 10% to 20% by 2030. According to von der Leyen, "The capacity will have to be quadrupled, and this is only possible with companies like Infineon."
At the ceremony on Tuesday, Infineon CEO Jochen Hanebeck said, "With this groundbreaking, Infineon is launching an important contribution to the green and digital transformation of our society." Given the increased need for data centers, electric vehicles, and renewable energy sources, the global semiconductor market will continue to grow significantly and steadily.
Infineon anticipates that the plant will begin producing in 2026. The company's current manufacturing facility in Dresden will gain capacity thanks to the new 300mm fab, which is the largest investment in company history.
Currently, other chip producers are also making investments in Germany. Wolfspeed, a US-based company, is spending €2.7 billion to develop a facility in Saarland, and Intel is spending €17 billion to create a much larger facility near Magdeburg.
Von der Leyen cautioned that, even if the EU's chip ambitions are taking shape, Europe is still overly dependent on a small number of suppliers for raw materials, citing the fact that China holds a 76% market share of the silicon metal required for chip manufacturing.
She stated that the bloc is looking into new projects in Europe as well as collaborations with nations like Australia, the US, and Canada in order to get raw resources closer to home. The Vital Raw Materials Act, recently ratified by the EU, aims to guarantee that Europe has steady access to vital rare earth elements and raw materials.
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