Germany is redirecting €3B from its semiconductor subsidy program to repair roads and bridges

Source Cryptopolitan

Germany has redirected funds meant for its semiconductor industry to its infrastructure. The country’s semiconductor sector, which is already plagued by delays, uncertainty, and international competition, is now facing another setback as the government diverts funds away from the sector.

Germany’s goal to reclaim a significant role in the global semiconductor industry has suffered a major setback after the government announced plans to cut €3B ($3.5B) from its chip subsidy budget. 

The funds, which were originally designated to boost the production of domestic microelectronics, will instead be used to repair the country’s deteriorating streets and bridges.

Germany redirects funds to infrastructure  

“We are making difficult but responsible choices,” Germany’s Vice Chancellor Lars Klingbeil said during a press conference to announce the funds reallocation on Thursday. He added that the “necessary measure” addresses aging infrastructure and fiscal challenges that are “crucial for both economic productivity and public safety.”

The German government earlier announced that it would channel €15B ($17.4B) in subsidies toward semiconductor manufacturing between 2025 and 2028. The funds were central to Berlin’s strategy for reducing its dependence on Asian chip suppliers and strengthening the European Union’s position in the global tech supply chain.

Beyond this reallocation, Germany’s semiconductor push has already faced multiple obstacles. Intel Corp. earlier this year scrapped plans for a $34.7B chip plant in Magdeburg over cost pressures and uncertain funding conditions. 

With Germany going back on its decision, industry concerns about Germany’s ability to compete globally in a sector dominated by Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung Electronics, and Intel have returned.

Fund reallocation was unpopular among industry stakeholders

The German government’s “difficult but responsible choices” have quickly drawn criticism from industry groups and stakeholders, who warned that the funding cuts could have lasting repercussions on industrial competitiveness and strategic autonomy.

“This would send a disastrous signal not only for the economic viability of our country, but also for its strategic capacity to act,” Sarah Bäumchen, the managing director of the ZVEI electrical and digital industry association, said. She emphasized that microelectronics is a “key technology vital for survival” and essential to the country’s industrial future.

Germany approved around $2.3B in semiconductor subsidies last year, but none of the funds have yet been disbursed. The Ministry for Economic Affairs previously admitted it was caught off guard by the number of funding applications, which exceeded initial expectations by nearly threefold.

Frank Bösenberg, head of the Silicon Saxony industry group, said he understood the government’s financial constraints but stressed the need for “planning security and speed in the implementation of corresponding programs.” He added that uncertainty in policy and funding discourages private investment, particularly in capital-intensive sectors like chip making.

A spokesperson for Infineon Technologies AG, one of Germany’s largest semiconductor firms, clarified that ongoing and approved projects would not be affected by the cuts. 

Germany has been struggling to balance post-pandemic recovery spending with its constitutional “debt brake,” which is a law that limits public borrowing. 

The EU launched its Chips Act with the goal of doubling its global market share in chip manufacturing from 8% to 20% by 2030. But according to a joint report by ZVEI and Strategy&, Europe’s share had already fallen to 8.1% in 2024, and is projected to decline further without substantial new investment.

Meanwhile, global rivals are accelerating their chip strategies. China has dedicated $142B in public funding to boost domestic production, and the United States has allocated $52B through its own Chips Act. These massive investments have attracted private capital and manufacturing projects, creating an increasingly uneven playing field for European firms.

Get up to $30,050 in trading rewards when you join Bybit today

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
What to expect from Ethereum in October 2025With broader sentiment worsening, user demand falling across the Ethereum network, and institutional investors pulling back, the coin faces mounting headwinds in October.
Author  Beincrypto
Sep 30, Tue
With broader sentiment worsening, user demand falling across the Ethereum network, and institutional investors pulling back, the coin faces mounting headwinds in October.
placeholder
Gold Price Forecast: XAU/USD holds gains above $4,000 on concerns over US government shutdownGold price (XAU/USD) holds positive ground near $4,010 after retreating from a fresh record high of $4,059 in the previous session during the early Asian session on Thursday. Broader geopolitical and economic uncertainty firmed traders' demand for the safe-haven asset. 
Author  FXStreet
Yesterday 01: 08
Gold price (XAU/USD) holds positive ground near $4,010 after retreating from a fresh record high of $4,059 in the previous session during the early Asian session on Thursday. Broader geopolitical and economic uncertainty firmed traders' demand for the safe-haven asset. 
placeholder
Gold retreats from all-time peak as Israel-Hamas peace deal tempers safe-haven demandGold (XAU/USD) drifts lower during the Asian session on Thursday and now seems to have snapped a four-day winning streak to a fresh all-time peak, around the $4,059-4,060 area touched the previous day.
Author  FXStreet
20 hours ago
Gold (XAU/USD) drifts lower during the Asian session on Thursday and now seems to have snapped a four-day winning streak to a fresh all-time peak, around the $4,059-4,060 area touched the previous day.
placeholder
Bitcoin Slides From $126,000 Peak as Market Eyes Whether Uptober Rally Can LastAfter reaching a new all-time high of over $126,000 earlier this week, Bitcoin’s (BTC) price has slipped slightly, raising questions about the sustainability of its recent rally.
Author  Beincrypto
17 hours ago
After reaching a new all-time high of over $126,000 earlier this week, Bitcoin’s (BTC) price has slipped slightly, raising questions about the sustainability of its recent rally.
placeholder
Bitcoin and Ether face volatility as $5.3B options expireBTC, ETH options for a total of $5.3B are expiring on Friday, bringing another period of potential price volatility.
Author  FXStreet
16 hours ago
BTC, ETH options for a total of $5.3B are expiring on Friday, bringing another period of potential price volatility.
goTop
quote