German French fries factory breaks ground in ‘major step forward’ for EU
Germany’s Infineon has broken ground on its new €5 billion semiconductor plant in Dresden less than six months after announcing the project.
Speaking at the groundbreaking ceremony yesterday, European Commission President Ursula von der Leyen hailed the construction as a “great step forward” towards the goal to increase its market share in semiconductors.
Europe is currently struggling to become less dependent on foreign imports of semiconductor chips from China, Taiwan and South Korea, among others. “These are regions where tensions could flare up at any time,” he said von der Leyen, a nod to the current tensions between Beijing and Taipei. “The slightest disruption to trade would immediately hit Europe’s strong industrial base and our internal market hard.”
The bloc believes boosting domestic production of the chips – essential components in everything from cars to smartphones – will ease the supply shortages that have arisen teased many of the EU’s vital technology sectors in the past two years.
Under the EU chip law, who got the green light last month, the bloc is mobilizing 43 billion euros for this double its market share in semiconductors from 10% to 20% by 2030. “The capacity will have to be quadrupled, and that is only possible with companies like Infineon,” said von der Leyen.
“With this groundbreaking launch, Infineon is launching an important contribution to the green and digital transformation of our society,” said Jochen Hanebeck, CEO of Infineon, at the ceremony on Tuesday. “Global demand for semiconductors will grow strongly and sustainably given the high demand for renewable energy, data centers and electromobility.”
Infineon expects production at the plant to start in 2026. The new 300mm factory represents the largest investment in the company’s history and will add capacity to the current production site in Dresden.
Other chip manufacturers are also currently investing in Germany. Wolfspeed from the US invests 2.7 billion euros to build a factory in Saarland, while Intel is building an even one bigger factory in Magdeburg that will cost €17 billion.
As the EU’s chip plans take shape, von der Leyen warned that Europe was still too dependent on raw materials from individual suppliers, pointing to the fact that China holds 76% of the silicon metal supply needed for chip production.
To secure raw materials closer to home, the bloc is exploring new projects in Europe, as well as partnerships with countries such as Australia, the US and Canada, according to her. The EU too recently passed the Critical Raw Materials Act to ensure that Europe secures a stable supply of critical rare earths and raw materials.
