Germany, known as Europe’s industrial powerhouse, is gearing up to establish itself as a prominent player in semiconductor production. The European Union’s recent enactment of the European Chips Act aims to double semiconductor fab capacity by 2030. Germany plans to utilize the €43 billion Chips Act subsidy and native incentives to attract a significant portion of this capacity to its borders.

Driven by recent supply chain disruptions and concerns over the vulnerability of Asian electronics supply chains, both the U.S. and Europe are pushing for diversified supply sources. Europe, currently providing 10% of global semiconductors, seeks to increase this to 20% by 2030.

Germany, already a key semiconductor player, hosts one-third of Europe’s semiconductor production, centered in Saxony. TSMC’s €10 billion facility plans in Dresden highlight Germany’s involvement. Intel’s record-breaking €30 billion investment for two new fabs in Magdeburg and TSMC’s €10 billion commitment, supported by investments from Bosch, Infineon, and NXP, underscore the nation’s growing semiconductor focus.

Other major investments include GlobalFoundries’ capacity expansion, Wolfspeed’s cutting-edge SiC fab in Saarland, and Littelfuse’s acquisition of a fab in Dortmund. However, despite these efforts, Germany faces a shortage of 62,000 skilled workers in the chip industry. Addressing this labor shortage is vital to maximize the potential of these burgeoning semiconductor initiatives.