German chip industry is still waiting for funding

Politicians promised the semiconductor industry billions – but the companies didn’t (yet) get anything. Europe’s chip catch-up threatens to be delayed before it even begins.

Silicon carbide is the chip material of the future. However, one aspect is still slowing down the spread of semiconductors: They are at least twice as expensive as conventional silicon components. The start-up mi2-factory wants to significantly reduce production costs with a new technology – initially by 30 and in the long term possibly even by 50 percent. This would be a blessing for the European chip industry, after all silicon carbide (SiC) semiconductors are one of the few areas in the industry in which Europe is still world class.

For the construction of a prototype of its chip machine, mi2-factory initially needs an amount in the double-digit millions. In recent months, politicians have announced that billions will be made available for the chip industry, but it is still unclear when and how much money can be expected. mi2-factory is not alone in its disappointment at the current uncertainty: According to the Handelsblatt, even large semiconductor manufacturers are privately complaining that state aid is a long time coming and that the award rules would rather delay innovations than accelerate them.

The EU initially gave the industry so much hope with its ambitious goals. At the beginning of the year, Commission President Ursula von der Leyen presented a plan according to which Europe should more than double its share of global semiconductor production by 2030 with the help of a large-scale funding program. With an investment of 43 billion euros in public funds, the EU wants to make up for Europe’s deficit and reduce its dependency on Asia.

While established companies such as Bosch are “only” at a disadvantage compared to the competition from Asia, the possible consequences for a young company like mi2-factory are of course even more dramatic: the start-up could fail along with its innovative technology, if the expected subsidies do not materialize. However, such domestic chip start-ups are extremely important for the German economy. This is why the Federation of German Industries (BDI), among others, is urging the EU in a position paper to decide quickly on which projects are to be funded and how long they have to be waiting.

Source: Handelsblatt